Inequality in models with a competition for market shares

Andreas Hefti and Julian Teichgräber

No 375, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: This paper develops a framework to systematically study how changes in market conditions affect the equilibrium inequality between heterogeneous agents. By stating our setting as a "competition for market shares", we can derive inequality predictions for vastly different competition models. This approach allows us to identify a common structure, e.g., in monopolistic competition, perfect competition, or competition for prizes, that explains why these models deliver similar inequality predictions. We apply our results to problems from trade, competition theory, consumption inequality, political economics and marketing, and relate some of the predicted inequality patterns to empirical evidence.

Keywords: Inequality analysis; market shares; power functions; monopolistic competition; perfect competition competition for prizes (search for similar items in EconPapers)
JEL-codes: C65 D30 D41 E10 L11 M37 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-com, nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:375

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