A research on market competition and social welfare : Technology investments, firm heterogeneity, and vertical trading

我们研究市场竞争如何影响企业利润和社会福利。我们特别考虑了三个方面：技术投资，公司异质性和垂直交易。我们研究了几种市场结构，并显示了与市场竞争有关的有趣结果。例如，我们展示了一个市场条件，即低效率企业的进入增强了在位高效率企业参与成本降低活动的激励。如果市场进入的效果良好，那么那些高效率企业的利润会因市场进入而增加。也就是说，市场进入可以使在位企业受益。此外，足够低效率的企业进入市场有利于社会福利，这与现有的结果相反。

We investigate how market competition affects firm profits and social welfare. We especially take into account three aspects : technology investments, firm heterogeneity, and vertical trading. We investigate several market structures and show interesting results related to market competition. For instance, we show a market condition that entry of inefficient firms enhances the incentive of incumbent efficient firms to engage in cost-reducing activities. If the effect of entry works well, the profits of those efficient firms can increase by the entry. That is, market entry can benefit incumbent firms. Furthermore, entry by sufficiently inefficient firms can benefit social welfare, which is contrast with the existing results.