The Disequilibrium Approach to Monopolistic Price Setting and General Monopolistic Equilibrium

General equilibrium models of monopolistic competition: A new approach

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

General equilibrium models of monopolistic competition: CRRA versus CARA∗

We analyze a class of ‘large group’ Chamberlinian monopolistic competition models using multiplicatively quasi-separable (MQS) and additively quasi-separable (AQS) functions. We first prove that the MQS and AQS functions are equivalent to the ‘constant relative risk aversion’ (CRRA) and ‘constant absolute risk aversion’ (CARA) classes of functions, respectively. Whereas both approaches allow fo...

Monopolistic Competition: A Dual Approach

We study monopolistic competition under indirect additivity of preferences. This is dual to the Dixit-Stiglitz model, where direct additivity is assumed, with the CES case as the only common ground. Other examples include (perceived) demand functions that are exponential or linear. Our equilibrium results are generally in contrast with those received by the literature. An increase of the number...