Competition and efficiency in congested markets
Edición de la obra Competition and efficiency in congested markets
| Autor | Daron Acemoglu |
|---|---|
| Editorial | Massachusetts Institute of Technology, Dept. of Economics |
| Fecha de publicación | 2006 |
| Lugar | Cambridge, MA |
| Idioma | inglés |
| Páginas | 48 |
| OCLC | 169946562 |
| Serie | Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 06-11 · Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 06-11. |
| Número de Cutter | A173c |
We study the efficiency of oligopoly equilibria in congested markets. The motivating examples are the allocation of network flows in a communication network or of traffic in a transportation network. We show that increasing competition among oligopolists can reduce efficiency, measured as the difference between users' willingness to pay and delay costs. We characterize a tight bound of 5/6 on efficiency in pure strategy equilibria when there is zero latency at zero flow and a tight bound of 2 root2-2 with positive latency at zero flow. These bounds are tight even when the numbers of routes and oligopolists are arbitrarily large. Keywords: competition, congestion, externalities, networks, oligopoly. JEL Classifications: D43, D45, D62.