Equilibrium existence and uniqueness in additive trade models

Fedor Slepov () and Sergey Kokovin
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Fedor Slepov: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: This paper develops a modeling technique of “attainable profit” functions, applying it to two models of monopolistic competition. First, it revisits the Krugman’s classical trade model in the most general form: several asymmetric countries and non-specified additive utility functions. We establish the weakest conditions on utilities, sufficient for the existence of equilibria. These conditions are also necessary under symmetric preferences. Equilibrium uniqueness is proved only for the case of two countries. Second, we study another, “indirectly additive” trade model (Bertoletti and Etro, 2015), and establish weak conditions on non-specified indirect utilities for the existence of equilibria in several asymmetric countries.

Keywords: international trade; monopolistic competition; variable elasticity of substitution; variable markups; existence of equilibria; attainable profits (search for similar items in EconPapers)
JEL-codes: D43 F12 L13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023
New Economics Papers: this item is included in nep-int and nep-upt
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Published in WP BRP Series: Economics / EC, November 2023, pages 1-31

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:262/ec/2023

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