Abstract

PATEIRO-RODRIGUEZ, Carlos; PRADO-DOMINGUEZ, A. Javier; GARCIA-IGLESIAS, Jesús M.  and  BARREIRO-VINAN, José M.. Duopolio con costos de cambio y de retención: Efectos sobre el excedente del consumidor y el bienestar social. Inv. Econ [online]. 2015, vol.74, n.292, pp.159-184. ISSN 0185-1667.

In a context of a market with free entry, we analyse the changes in consumer surplus, social welfare and the other equilibrium conditions when a competitor enters a monopolistic market where there is an established firm. We study the equilibrium in a duopolistic model by assuming that if the potential entrant decides to enter, there then follows a single period of Cournot-Nash quantity competition. We add retention costs in Klemperer model (1988) and, under certain assumptions about who bears these costs, we analyse and compare the results. Assume linear demand and that both firms have constant marginal costs. Work results are important for the analysis of the implications for welfare of regulatory policies. Finally, our work includes a simulation to test the theoretic model and to validate the relevant results in terms of social welfare, consumer surplus, profits and quantities in monopoly, duopoly with switching costs and duopoly with switching and retention costs.

Keywords : openness public policies; switching costs; retention costs; consumer surplus; social welfare.