Welfare, Competition, Specialization and Growth

Daria Onori

No 2011011, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper we consider a simple model of horizontal differentiation and derive the closed form solutions for the level of the variables in the decentralized economy and in the social planner case. This enables us to analyze consumers’ welfare as a function of the parameter representing market power. We surprisingly find that, when the total labor force is greater than a certain level, the welfare function is an inverted-N shape in the decentralized economy and monotonically decreasing in the centralized economy. This suggests that there is another effect which interacts with market power: the degree of returns to specialization.

Keywords: Closed form solutions; Welfare; Competition; Degree of returns to specialization (search for similar items in EconPapers)
JEL-codes: C61 L16 L4 O31 O33 (search for similar items in EconPapers)
Pages: 23
Date: 2011-03-28
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2011011.pdf (application/pdf)

Related works:
Journal Article: Welfare, competition, specialization and growth (2012)
Working Paper: Welfare, Competition, Specialization and Growth (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2011011

Access Statistics for this paper

More papers in LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().