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Licensed Unlicensed Requires Authentication Published by De Gruyter August 18, 2008

Equilibrium State Aid in Integrating Markets

  • Stephen Martin and Paola Valbonesi

Abstract

We present a model of the impact of state aid on equilibrium market structure and on market performance in an integrating market when the process of integration is driven by consumer inertia. In a partial equilibrium model, it is an equilibrium for governments to grant state aid, even though this reduces common market welfare.

Published Online: 2008-8-18

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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