Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 70: Subsidies in Oligopoly Markets: A Welfare Comparison between Symmetric and Asymmetric Costs

Stephen F. Hamilton and Rickard Sandin
Additional contact information
Rickard Sandin: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden

Abstract: This paper studies welfare effects of uniform production subsidies in oligopoly markets, comparing cases of asymmetric and symmnetric costs. Cost asymmetry reduces the impact if the demand function is concave and magnifies the impact if demand is convex.

Keywords: Subsidies; oligopoly; cost asymmetry

JEL-codes: L52

12 pages, September 1995

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