We propose a general model of monopolistic competition which encompasses existing models while being flexible enough to take into account new demand and competition features. Even though preferences need not be additive and/or homothetic, the market outcome is still driven by the sole variable...

Spatial economics aims to explain the location of economic activity. While the importance of the proximity to natural resources has declined considerably, distance and location have not disappeared from economic life. Recent work in spatial economics indicates that new forces, hitherto...

We present a natural generalization of the Dixit-Stiglitz monopolistic competition model (DSM) -- we assume that there is a continuum of industries, each of them described as in DSM, and each characterized with its own elasticity of substitution. Although firms in all industries share the same...

We show that a market involving a handful of large-scale firms and a myriad of small-scale firms may give rise to different types of market structure, ranging from monopoly or oligopoly to monopolistic competition through new types of market structure. In particular, we find conditions under...

We develop a dynamic model of monopolistic competition which sheds light on how the interplay between the degree of product differentiation and intertemporal elasticity of substitution affects the steady-state equilibrium. Consumers love variety and split their labor endowment between wage...

Studying the standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on the function elasticities, when an expanding market or trade incur welfare losses. Two numerical examples explain why: either excessive or insufficient...

The paper examines an interaction of boundedly rational firms that are able to calculate their gains after reaction of an opponent to their own deviations from the current strategy. We consider an equilibrium concept that we call a Nash-2 equilibrium. We discuss the problem of existence and...

We provide a selective survey of what has been accomplished under the heading of monopolistic competition in industrial organization and other economic fields. Among other things, we argue that monopolistic competition is a market structure in its own right, which encompasses a much broader...

We develop a simple partial-equilibrium model of endogenous city structure formation. No production externalities are at work, the only two forces shaping the spatial configurations of the city being love for variety (on the consumer side) and seeking for a better access to the market (on the...

We show that a wide class of demand systems for differentiated products, such as those generated by additive preferences, indirectly additive preferences, and Kimball-like homothetic preferences, can be given a multinomial logit foundation provided that the conditional indirect utility is...