The thery f cntestable markets has shwn that the existence f ne r a limited number f firms in an industry des nt mean that there is n cmpetitin in that industry. If the indus-try is perfectly cntestable, ptential cmpetitin (the threat f entry) will ensure the desired welfare utcmes and it shuld nt be regulated. Thus, the mdel f perfect cntestability is a beter Standard fr cmpetitin plicies than the mdel f perfect cmpetitin. The thery f cntestable markets des nt intend t be a theretical argument against regulatin. Rather, its main cntributin is t prvide a guide fr regulatry and antitrust plicies. Regulatrs shuld implement plicies that prmte cntestability and given the imprtance f ptential entry, the terms in cmpetitin laws such as mnply pwer and dminant psitin shuld nt be equated with industry cncentratin.
Other ID | JA46AU96HZ |
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Journal Section | Articles |
Authors | |
Publication Date | December 1, 2002 |
Published in Issue | Year 2002 Volume: 4 Issue: 3 |