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Toward a theory of monopolistic competition

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

No 2015012, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We propose a general model of monopolistic competition with unspecified preferences. Our analysis applies to the case of symmetric/asymmetric preferences and costs. Our basic tool is the elasticity of substitution function, which is shown to depend on the actions taken by firms. We impose intuitive conditions on this function to guarantee the existence of a free-entry equilibrium. Comparative statics with respect to population size, GDP per capita and productivity shocks (the pass-through rate) is conducted by means of necessary and sufficient conditions in the case of symmetric firms.

Keywords: monopolistic competition; general equilibrium; additive preferences; homothetic preferences (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2015-02-20
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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 (2014) Downloads
Working Paper: Toward a theory of monopolistic competition (2014) Downloads
Working Paper: Toward a theory of monopolistic competition (2014) Downloads
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