Picard, Pierre M.; Toulemonde, Eric - In: Canadian Journal of Economics 42 (2009) 4, pp. 1347-1360
In the Dixit-Stiglitz model of monopolistic competition, entry of firms is socially too small. Other authors have shown that excess entry is also a possibility with other preferences for diversity. We show that workers' rents also contribute to explain excess entry through a general equilibrium...