Monopolistic competition Equilibrium and optimality*
نویسنده
چکیده
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 consumer is of the form u = v(¿i; 1 xi) + 1, being x¡ the consumption of good i and 1 leisure, optimal and equilibrium output coincide and the optimal number of active firms is larger than the equilibrium number. Dixit-Stiglitz (1977) working with a somewhat different model, obtained the same conclusion. AIso they showed that if the utility function is of the form (¿i; 1 V(X¡))b 1 , equilibrium output may be greater, equal or smaller than the optimal output [see also Pettengill (1979), Dixit-Stiglitz (1979) and Koenker-Perry (1980)]. Lancaster (1979) and Salop (1979) considered the characteristic approach and the Hotelling model respectively. Finally Sattinger (1984), Perloff-Salop (1985) and Hart (1985a, b) studied models in which there are many consumers with preferences distributed as random variables, and Anderson-De Palma-Thisse (1987) have shown that under sorne conditions this model is equivalent to the representative consumer model. In this paper 1 analyze the relationship between Monopolistically Compe-
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تاریخ انتشار 1990