Oligopolistic vs. monopolistic competition: do intersectoral effects matter?

d’ASPREMONT, Claude () and Rodolphe Dos Santos Ferreria ()
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d’ASPREMONT, Claude: CORE, UniversitéCatholique de Louvain, Voie du Roman Pays 34, B-1348 Louvain-la-Neuve, Belgium
Rodolphe Dos Santos Ferreria: BETA, Université de Strasbourg, France, and FCEE, Universidade Cataolica Portuguesa, Lisbon, Portugal
Authors registered in the RePEc Author Service: Claude d'Aspremont and Rodolphe Dos Santos Ferreira

No 2015002, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Recent extensions of the standard Dixit-Stiglitz (1977) model, that go beyond the CES sub-utility assumption, while maintaining monopolistic competition, have mainly emphasized the role of iintrasectoral substitutability. We argue that introducing oligopolistic competition can be an alternative extension, still tractable, allowing to restore the role of intersectoral substitutability and reinforcing the general equilibrium dimension of the model. For this purpose, we use the concept of oligopolistic equilibrium and derive a comprehensive formula to characterize the set of potential equilibria with varying competitive toughness. For two particular competitive regimes, price competition and quantity competition, we show how, with strategic interactions, procompetitive or anti-competitive effects now depend on the elasticity of intersectoral substitution as compared to the elasticity of intrasectoral substitution.

Keywords: monopolistic competition; oligopolistic competition; general equilibrium; intersectoral substitution (search for similar items in EconPapers)
JEL-codes: D43 D51 L13 (search for similar items in EconPapers)
Date: 2015-02-02
New Economics Papers: this item is included in nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Oligopolistic vs. monopolistic competition: Do intersectoral effects matter? (2016)
Working Paper: Oligopolistic vs. monopolistic competition: do intersectoral effects matter? (2016)
Working Paper: Oligopolistic vs. monopolistic competition: Do intersectoral effects matter? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2015002

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