Monopolistic competition and optimum product diversity
Avinash Dixit,Joseph E. Stiglitz +1 more
TLDR
In this article, Pettengill tests whether there is an excessive number of firms in a monopolistically competitive equilibrium by a device of considerable expository merit, and redistributes the resources thus released equally over the remaining firms in the sector, to see if welfare can be improved.Abstract:
Pettengill tests whether there is an excessive number of firms in a monopolistically competitive equilibrium by a device of considerable expository merit. He removes one firm, and redistributes the resources thus released equally over the remaining firms in the sector, to see if welfare can be improved. To do this correctly, we write n, for the equilibrium number of firms and xe for the output of each. With fixed cost a and constant average variable cost c, removing one firm releases (a + Cxe) of resources, and this enables the output of each of the remaining ( I) firms to be increased (a + c Xe )/(1fl 1)}. The quantity xo of the numeraire good is unaffected by this, and the utility function (equation (31) of our paper) isread more
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Endogenous Technological Change
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The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity
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A Model of Growth Through Creative Destruction
Philippe Aghion,Peter Howitt +1 more
TL;DR: In this paper, a model of endogenous growth is developed in which vertical innovations, generated by a competitive research sector, constitute the underlying source of growth and equilibrium is determined by a forward-looking difference equation, according to which the amount of research in any period depends upon the expected amount of the research next period.
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Scale Economies, Product Differentiation, and the Pattern of Trade
TL;DR: In this article, the authors present a simple formal analysis which incorporates these elements, and show how it can be used to shed some light on some issues which cannot be handled in more conventional models.
References
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Book ChapterDOI
A New Approach to Consumer Theory
TL;DR: In this article, the authors extend activity analysis into consumption theory and assume that goods possess, or give rise to, multiple characteristics in fixed proportions and that it is these characteristics, not goods themselves, on which the consumer's preferences are exercised.