A BEJEAP Topics article.

Abstract

We present a model of the impact of state aid on equilibrium market structure and on market performance in an integrating market when the process of integration is driven by consumer inertia. In a partial equilibrium model, it is an equilibrium for governments to grant state aid, even though this reduces common market welfare.

Submitted: October 4, 2007 · Accepted: June 24, 2008 · Published: August 18, 2008

Recommended Citation

Martin, Stephen and Valbonesi, Paola (2008) "Equilibrium State Aid in Integrating Markets," The B.E. Journal of Economic Analysis & Policy: Vol. 8 : Iss. 1 (Topics), Article 33.
DOI: 10.2202/1935-1682.1904
Available at: http://www.bepress.com/bejeap/vol8/iss1/art33