Does Perfect Competition in Spatial Markets Maximize Welfare?

1977 ◽  
pp. 67-72
Author(s):  
Martin J. Beckmann
Keyword(s):  
Perfect Competition

Relation-Based Governance and Competition

2017 ◽  
Author(s):  
Avinash Dixit
Keyword(s):  
Spatial Model ◽  
Monopolistic Competition ◽  
Perfect Competition ◽  
Alternative Methods ◽  
Fixed Costs ◽  
Relational Governance ◽  
Dead Weight ◽  
Small Communities ◽  
Information And Communication ◽  
Size Of Firms

If formal institutions of contract governance are absent or ineffective, traders try to substitute relational governance based on norms and sanctions. However, these alternatives need good information and communication concerning members’ actions; that works well only in relatively small communities. If there are fixed costs, the market has too few firms for perfect competition. The optimum must be a second best, balancing the effectiveness of contract governance and dead-weight loss of monopoly. This chapter explores this idea using a spatial model with monopolistic competition. It is found that relational governance constrains the size of firms and can cause inefficiently excessive entry, beyond the excess that already occurs in a spatial model without governance problems. Effects of alternative methods of improving governance to ameliorate this inefficiency are explored.

Consistent Comparisons Between Monopoly and Perfect Competition

1992 ◽  
Vol 23 (3) ◽  
pp. 255-261
Author(s):  
Susan E. Skeath ◽  
Ann D. Velenchik ◽  
Len M. Nichols ◽  
Karl E. Case
Keyword(s):  
Perfect Competition

Patinkin, Perfect Competition, and Unemployment Disequilibria

1964 ◽  
Vol 31 (2) ◽  
pp. 121 ◽  
Author(s):  
D. Calvin Gogerty ◽  
Gordon C. Winston
Keyword(s):  
Perfect Competition

Perfect Competition and the Core

1982 ◽  
Vol 49 (1) ◽  
pp. 15 ◽  
Author(s):  
Andreu Mas-Colell
Keyword(s):  
Perfect Competition ◽  
The Core

Macroeconomics with Non-Perfect Competition: A Reply

1982 ◽  
Vol 92 (367) ◽  
pp. 706
Author(s):  
Yew-Kwang Ng
Keyword(s):  
Perfect Competition

Analysing the Finnish pulpwood market under alternative hypotheses of competition

2001 ◽  
Vol 31 (2) ◽  
pp. 236-245 ◽  
Author(s):  
A Maarit I Kallio
Keyword(s):  
Dynamic Models ◽  
Production Capacity ◽  
Perfect Competition ◽  
Forest Sector ◽  
Investment Behavior ◽  
Pulp Industry ◽  
Variable Capacity ◽  
Short Run ◽  
Alternative Hypotheses ◽  
Capacity Constrained

Efficient functioning of the wood market is crucial in a country where the forest sector is of strong macroeconomic importance. We investigate the possibility of noncompetitive behavior of the buyers in the Finnish pulpwood market. We simulate the buyers' behavior under alternative competition structures (perfect competition, Cournot oligopsony, and monopsony) and compare the simulated equilibria with the observed behavior in the years 1988–1997. In the static models the pulp industry firms are assumed to maximize their short-run variable profits either under fixed production capacity or, hypothetically, under variable capacity. The results suggest that, during the boom years, the industry has been capacity constrained, sometimes even for monopsony output. During the recession years, the actual wood prices have often been between simulated Cournot oligopsony and monopsony prices. Hence, noncompetitive behavior of the buyers is possible during the recessions. The capacity investment behavior of the industry is explored with dynamic models. The conclusions from these models depend on the price elasticity of pulpwood supply used.

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