Multiproduct Firms, Income Distribution, and Trade

Marcia M Schafgans and Joachim Stibora

STICERD - Economics of Industry Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: We develop a general equilibrium model of multiproduct fi rms with quality differentiated goods. Households are characterized by an heterogeneous taste for the differentiated good and their income level. The use of non-homothetic preferences and vertical product differentiation (product quality) enables us to analyze how distributional changes in income affect the number of vertically differentiated firms, their product range and prices in the presence of strategic interaction across rms. The implications of lowering the barriers to trade within this setting are considered as well.

Keywords: Multiproduct Firms; Endogenous Product Scope; Product Quality; Income Distribution; Discrete Choice; Trade Liberalization; Oligopoly (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-dcm and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:cep:stieip:52

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