Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences

Hend Ghazzai (), Wided Hemissi, Rim Lahmandi-Ayed and Sana Mami Kefi

Revue d'économie politique, 2021, vol. 131, issue 2, 249-261

Abstract: This note considers a general equilibrium model where individuals are potentially consumers, workers, and shareholders. It extends the results obtained previously by Kahloul et al. [2017] with extreme ownership structures on the majority vote between Monopoly and Duopoly, to the case of any proportion of shareholders in the population. We prove that Duopoly is preferred when non-shareholders constitute a majority of the population. Otherwise, the majority vote depends on the proportion of shareholders and the dispersion of the individuals with respect to their intensity of preference for quality relative to their sensitivity to effort. JEL Classification: D7, L13

Keywords: Imperfect Competition; Democracy; Vertical Differentiation; General Equilibrium; Ownership Structure (search for similar items in EconPapers)
JEL-codes: D7 L13 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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