Welfare, Competition, Specialization and Growth

Daria Onori

Working Papers from HAL

Abstract: In this paper we consider a simple model of horizontal differentiation and derive the closed form solutions for the level of the variables in the decentralized economy and in the social planner case. This enables us to analyze consumers' welfare as a function of the parameter representing market power. We surprisingly find that, when the total labor force is greater than a certain level, the welfare function is an inverted-N shape in the decentralized economy and monotonically decreasing in the centralized economy. This suggests that there is another effect which interacts with market power: the degree of returns to specialization.

Keywords: Closed form solutions; Welfare; Competition; Degree of returns to specialization (search for similar items in EconPapers)
Date: 2011-03-29
New Economics Papers: this item is included in nep-com
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00580722
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Related works:
Journal Article: Welfare, competition, specialization and growth (2012)
Working Paper: Welfare, Competition, Specialization and Growth (2011)
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