This paper shows that the adoption of flexible manufacturing techniques by firms leads to a tougher price regime. This need not benefit consumers since the tougher regime deters entry and facilitates segmented market structures. The ability of flexible manufacturing to deter entry is moderated...

In a model of horizontal product differentiation, we show that local monopolies may exist under free entry when capital is perfectly mobile. In contrast both with the situation of restricted entry and with the zero-profit approach to free entry outcomes of Salop (1979), the unit profit rate of...

This paper shows that the adoption of flexible manufacturing techniques by firms leads to a tougher price regime. This need not benefit consumers since the tougher regime deters entry and facilitates segmented market structures.

In a model of horizontal product differentiation, we show that local monopolied may exist under free entry when capital is perfectly mobile. In contrast both with the situation of restricted entry and with the zero-profit approach to free entry outcomens of Salop 91979), the unit profit rate of...

Consumer arbitrage affects discriminatory pricing across markets in several ways. If all consumers face the same arbitrage costs, a monopolist's profit increases with arbitrage costs, and overall welfare declines with them (if output does not rise). If arbitrage costs differ across consumers, a...

This paper tackles the issue of optimum product diversity in an imperfectly competitive market with small of large firms. First, it develops a quadratic utility model of monopolistic competition with horizontal product differentiation which avoids some of the main pitfalls of the S-D-S approach....

We study an endogenous business cycle model with Cournotian monopolistic competition and an endogenous number of firms in each sector. Our model is a simple general equilibrium macroeconomic model introducing overlapping generations both of consumers and firms. Firms strategically decide on...

We analyze the impact of a uniform price cap at electricity spot markets on firms investment decisions and on welfare. Since investment decisions for those markets are taken in the long run, fluctuating demand at the spot market eventually gives rise to high price spikes in case of binding...

We show that the simple fact that a monopolist sells a good in units whichare indivisible may we induce him to select a quality for his product which is not the highest one, even if no cost of any sort is attached to quality improvement.