EFFECTIVENESS OF RETAILER’S MARKET POWER: MONOPOLISTIC COMPETITION OF PRODUCERS
I.A. Bykadorov1,2, S.G. Kokovin3,4
1Sobolev Institute of Mathematics SB RAS, Novosibirsk
2NRU NSU, Novosibirsk
3NRU HSE, Moscow
4Novosibirsk State University of Economics and Management, Novosibirsk
Keywords: monopolistic competition, Dixit-Stiglitz model, retailer, social welfare
Abstract
In 2000s, Russian large retailers captured a large share of the market and obtained a significant market power. This change in the market organization may enhance or deteriorate social welfare. Public interest in this issue stimulated adoption by the Russian Parliament (State Duma) of the law against the concentration of trade in the hands of a few firms. In this paper we consider the question of efficiency, in terms of social welfare, this kind of state intervention in the relations between retailers and manufacturers.
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