Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201909 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7683
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Increased competition tends to benefit all buyers with increasing product variety and decreasing prices. However, if local and external market channels compete for the same class of products, increased competition from the external market crowds out local variety. Under local monopoly, local buyer surplus co-moves with external buyer surplus. Under local free entry oligopoly, buyer surplus is U-shaped. If buyer surplus in the external market is low, local surplus is better provided by local oligopoly, but moves against external surplus; if it is high, local and external surplus co-move, and local surplus is better provided by local monopoly.
Subjects: 
global competition
monopoly
oligopoly
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JEL: 
D83
L12
L13
L81
Document Type: 
Working Paper
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