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borderline case. Finally, we apply our setting to trade theory and uncover several new properties hindered by the CES, such as …
Persistent link: https://www.econbiz.de/10008466345
mass of varieties. We impose intuitive conditions on this function to guarantee the existence and uniqueness of a free-entry …
Persistent link: https://www.econbiz.de/10011083517
We develop a model of monopolistic competition that accounts for consumers’ heterogeneity in both incomes and preferences. This model makes it possible to study the implications of income redistribution on the toughness of competition. We show how the market outcome depends on the joint...
Persistent link: https://www.econbiz.de/10010743704
either varieties gets more and more differentiated or when the entry cost goes further and further down. …
Persistent link: https://www.econbiz.de/10005792439
We propose a general model of monopolistic competition and derive a complete characterization of the market equilibrium using the concept of Relative Love for Variety. When the RLV increases with individual consumption, the market generates pro-competitive effects. When it decreases, the market...
Persistent link: https://www.econbiz.de/10008876406
the higher toughness of the market, the entry of big firms leads them to sell more through a market expansion effect … oligopolistic firms because the procompetitive effect associated with the entry of a big firm dominates the resulting decrease in …
Persistent link: https://www.econbiz.de/10005048555
both market structures. Due to the higher toughness of competition, the entry of big firms leads them to sell more through … welfare increases with the number of big firms because the pro-competitive effect associated with entry dominates the …
Persistent link: https://www.econbiz.de/10009645823
The pattern of trade observed from firm-product-country data calls for a new generation of models. To address the unexplained variation in the data, we propose a new model of monopolistic competition where varieties enter preferences non-symmetrically, capturing both horizontal and vertical...
Persistent link: https://www.econbiz.de/10011083252
effect. Firms' profits increase (decrease) with the entry of local competitors when the former (latter) dominates. Downtown …
Persistent link: https://www.econbiz.de/10011084420
competition effect. Firms’ profits increase (decrease) with the entry of local competitors when the former (latter) dominates …
Persistent link: https://www.econbiz.de/10011117748