Input–output linkages and optimal product diversity

Sergey Kichko

Economics Letters, 2017, vol. 158, issue C, 58-61

Abstract: We derive a simple necessary and sufficient condition on preferences for the market outcome to be socially optimal under monopolistic competition with input–output (IO) linkages. Preferences that satisfy this condition are typically non-CES and display pro-competitive effects, although they converge to the CES when IO linkages become negligibly weak. We show that the equilibrium with pro-competitive effects may deliver both excess and insufficient entry of firms in equilibrium.

Keywords: Input–output linkages; Optimum product diversity; Monopolistic competition; Pro-competitive effects (search for similar items in EconPapers)
JEL-codes: D4 D6 L1 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176517302537
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Input-Output Linkages and Optimal Product Diversity (2017)
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:eee:ecolet:v:158:y:2017:i:c:p:58-61

DOI: 10.1016/j.econlet.2017.06.026

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().