 Private ownership in monopolistic competition modelsVincent Boitier Research in Economics, 2024, vol. 78, issue 4 Abstract: Motivated by empirical evidence, I study the properties of a monopolistic competition model with private ownership. Toward that goal, I consider a monopolistic competition model with additive preferences, homogeneous workers and homogeneous firms. I then introduce in such a standard framework a single additional ingredient: private ownership. Private ownership means that each firm is owned and managed by a single household called the entrepreneur, and this entrepreneur receives profits as sole revenues. In turn, private ownership changes the nature of entry. Free entry in the industry is no longer satisfied. Rather, the number of firms is now determined through occupational choice. Armed with this new framework, I provide a full characterization of a market equilibrium, and compare it to the standard model with collective ownership and free entry. Notably, I find new results concerning optimality, the transmission of aggregate shocks and the ability of the new model to replicate well-established empirical facts. Keywords: Private and common ownership; Monopolistic competition; Amplification/mitigation of supply shocks; Endogenous extensive margin (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:78:y:2024:i:4:s109094432400067x DOI: 10.1016/j.rie.2024.101003 Access Statistics for this article Research in Economics is currently edited by Federico Etro More articles in Research in Economics from Elsevier |
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