This paper discusses the impact of conformism on product quality, firm selection, and trade patterns. It shows that when consumers have a higher degree of conformism and/or their distribution of conformism becomes more concentrated, the equilibrium average demand falls while product quality...

This paper studies the e¤ects of consumer income heterogeneity on monopolistically competitive product markets and individual welfare in the context of non-homothetic preferences. When expenditure of richer individuals is less sensitive to price change compared to poorer ones, a mean-preserving...

This paper studies the market and welfare effects of income heterogeneity in monopolistically competitive product markets in the context of nonhomothetic preferences. In a closed economy, where richer individuals’ expenditures are less sensitive to price change compared to poorer ones’, a...