Monopolistic equilibrium and involuntary unemployment

Equilibrium Involuntary Unemployment Under Oligempory

We show that equilibrium involuntary unemployment emerges in a multi– stage game model where all market power resides with firms, on both the labour and the output market. Firms decide wages, employment, output and prices, and under constant returns there exists a continuum of subgame perfect Nash equilibria involving unemployment and positive profits. A firm does not undercut the equilibrium w...

A new model of equilibrium involuntary unemployment

We show that equilibrium involuntary unemployment emerges in a multi-stage game model where all market power resides with firms, on both the labour and the output market. Firms decide wages, employment, output and prices, and under constant returns there exists a continuum of subgame perfect Nash equilibria involving unemployment and positive profits. A firm does not undercut the equilibriumwag...

Monopolistic competition Equilibrium and optimality*

Since the publication of Chamberlin's book [The Theory of Monopolistic Competition (1933)], there has been sorne controversy about what is implied by adopting the Monopolistic Competition point of view [see for example Stigler (1968, p. 320) vs. Samuelson (1958)]. The first formal model of Monopolistic Competition is due to Spence (1976). He showed that if the utility function of the sole consu...

On Equilibrium in Monopolistic Competition

Multiplicity of Cournot Equilibria and Involuntary Unemployment

In an overlapping generations model with Cournot competition on the goods market it is shown that a continuum of stationary states and perfect foresight trajectories exists with unemployment at arbitrary low wages. Decisive for this is the influence that different forecast functions have on the objective demand curve, even though they are consistent with perfect foresight. With an example it is...