EconPapers    
Economics at your fingertips  
 

Toward a theory of monopolistic competition

Mathieu Parenti (), Philip Ushchev () and Jacques Thisse ()

No 2014046, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We propose a general model of monopolistic competition, which encompasses existing models while being flexible enough to take into account new demand and competition features. The basic tool we use to study the market outcome is the elasticity of substitution at a symmetric consumption pattern, which depends on both the per capita consumption and the total mass of varieties. We impose intuitive conditions on this function to guarantee the existence and uniqueness of a free-entry equilibrium. Comparative statics with respect to population size, GDP per capita and productivity shock are characterized through necessary and sufficient conditions. Finally, we show how our approach can be generalized to the case of a multisector economy and extended to cope with heterogeneous firms and consumers.

Keywords: monopolistic competition; general equilibrium; additive preferences; homothetic preferences (search for similar items in EconPapers)
JEL-codes: D43 L11 L11 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
Date: 2014-11-18
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://uclouvain.be/cps/ucl/doc/core/documents/coredp2014_46web.pdf (application/pdf)

Related works:
Journal Article: Toward a theory of monopolistic competition (2017) Downloads
Working Paper: Toward a theory of monopolistic competition (2017) Downloads
Working Paper: Toward a Theory of Monopolistic Competition (2016) Downloads
Working Paper: Toward a theory of monopolistic competition (2015) Downloads
Working Paper: Toward a theory of monopolistic competition (2014) Downloads
Working Paper: Toward a theory of monopolistic competition (2014) Downloads
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:cor:louvco:2014046

Access Statistics for this paper

More papers in CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Series data maintained by Alain GILLIS ().

 
Page updated 2017-11-15
Handle: RePEc:cor:louvco:2014046