Pro-competitive effect, division of labor, and firm productivity

Keita Kamei

Economics Letters, 2014, vol. 124, issue 1, 132-135

Abstract: This study constructs a general oligopolistic equilibrium model in which Smith’s (1776) famous theory of the division of labor under vertical specialization is embedded. We demonstrate that a pro-competitive government policy weakens the division of labor and hence reduces firm productivity, total output, and aggregate welfare. In addition, the policy promotes an increase in workers’ welfare and a decrease in firm owners’ welfare.

Keywords: Division of labor; Cournot competition; General oligopolistic equilibrium (GOLE); Pro-competitive government policy (search for similar items in EconPapers)
JEL-codes: L16 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:124:y:2014:i:1:p:132-135

DOI: 10.1016/j.econlet.2014.05.001

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