The Market Structure Simulation of Heterogenous Firms

The paper aims at the need for economic policy evaluators to assess how and whether specific measures can influence development of markets in a way that achieves greater wealth. Therefore, this study concentrates on well-documented firms’ heterogeneity significantly impact their ability compete, market structure, decide participate trade. For initial attributes features simulated model, we chose Ottaviano demand function. However, took different approach regarding its elasticities by employing distributional functions model each firm’s product. Allowing evolution reveals importance endowment factors suggests crucial role abilities compete. What is more important—it affects time needed structure formation. Although does not track all aspects heterogeneity, it might guide makers only support business increasing capabilities but keep struggling over competition impede collecting Ricardian rents.