Shirking and Capital Accumulation under Oligopolistic Competition

Haiwen Zhou and Ruhai Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: In this infinite horizon model, unemployment results from the existence of efficiency wages. Consumers choose saving optimally and there is capital accumulation. Firms producing intermediate goods engage in oligopolistic competition and choose technologies to maximize profits. A more advanced technology has a higher fixed cost but a lower marginal cost of production. In the steady state, it is shown that an increase in population size or a decrease in the discount rate leads intermediate good producers to choose more advanced technologies and the wage rate increases. Interestingly, the equilibrium unemployment rate decreases with the size of the population.

Keywords: : Unemployment; increasing returns to scale; capital accumulation; choice of technology; oligopolistic competition (search for similar items in EconPapers)
JEL-codes: E24 J64 L13 O14 (search for similar items in EconPapers)
Date: 2022-03-17
New Economics Papers: this item is included in nep-ind and nep-mac
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Related works:
Journal Article: Shirking and capital accumulation under oligopolistic competition (2023)
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