Multilateral adverse selection in industrial economics and general equilibrium

Funder

Organizational Unit

Publications

The footloose entrepreneur model with a finite number of equidistant regions

Publication . Gaspar, José M.; Castro, Sofia B. S. D.; Correia-da-Silva, João

We study the Footloose Entrepreneur model with a finite number of equidistant regions, focusing on the analysis of stability of agglomeration, total dispersion, and boundary dispersion. As the number of regions increases, there is more tendency for agglomeration and less tendency for dispersion. As it tends to infinity, agglomeration always becomes stable while dispersion always becomes unstable. These results are robust to any composition of the global workforce and its dependence on the number of regions. Numerical evidence suggests that boundary dispersion is never stable. We introduce exogenous regional heterogeneity and obtain a general condition for stability of agglomeration.

2019Journal article

Open access

Collusion in mixed oligopolies and the coordinated effects of privatization

Publication . Correia-da-Silva, João; Pinho, Joana

We study the sustainability of collusion in mixed oligopolies where private and public firms only differ in their objective: private firms maximize profits, while public firms maximize total surplus. If marginal costs are increasing, public firms do not supply the entire market, leaving room for private firms to produce and possibly cooperate by restricting output. The presence of public firms makes collusion among private firms harder to sustain, and maybe even unprofitable. As the number of private firms increases, collusion may become easier or harder to sustain. Privatization makes collusion easier to sustain, and is socially detrimental whenever firms are able to collude after privatization (which is always the case if they are sufficiently patient). Coordinated effects thus reverse the traditional result according to which privatization is socially desirable if there are many firms in the industry.

2018Journal article

Restricted access

Funding agency

European Commission

Funding programme

H2020

Funding Award Number

657283