Abstract
This paper provides the smallest upper bound or the critical level for a Cournot firm's market share below which its cost reduction reduces welfare. It shows that a firm's cost reduction increases social welfare with nonlinear demand and nonlinear costs if and only if its market share is above the critical level, which is equal to a weighted sum of the other firms' market shares. The paper also reports similar results for technological spill-overs within any given set of firms.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
