Oligopoly, collusion, entry and welfare

This paper analyses and shows the effects of entry into oligopoly. While entry affects prices and output, it may or may not impact welfare. However, the same in different oligopolistic set-ups has divergent and far-reaching welfare consequences. Specifically, we work with the 𝑛-firm Cournot and Bertrand set-ups and evaluate the effects of entry on collusion and welfare. Entry may be a more effective policy tool to counter collusion in Bertrand than the Cournot framework. Our results are novel and of policy importance.

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