Ownership structure and profit maximization in general equilibrium models of monopolistic competition

Vincent Boitier

Economics and Business Letters, 2023, vol. 12, issue 1, 85-90

Abstract: Using Hart (1979, 1985) and Mas-Colell (1984), I defend the idea that the standard ownership structure is somewhat problematic in general equilibrium models of monopolistic competition because profit maximization is not a justified objective of the firm. I then advocate that a solution to overcome this methodological issue is when ownership is disproportionally concentrated among households.

Date: 2023
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