Monopolistic Competition: Theory and Applications

The Theory of Monopolistic Competition, Marketing’s Intellectual History, and the Product Differentiation Versus Market Segmentation Controversy

Edward Chamberlin’s theory of monopolistic competition influenced greatly the development of marketing theory and thought in the 1930s to the 1960s. Indeed, marketers held the theory in such high regard that the American Marketing Association awarded Chamberlin the Paul D. Converse Award in 1953, which at the time was the AMA’s highest honor. However, the contemporary marketing literature virtu...

Together at Last: Trade Costs, Demand Structure, and Welfare

International trade, like many other branches of applied theory, has made enormous progress in recent decades by building on a central insight of Dixit and Stiglitz (1977): a taste for variety, the essential foundation for a theory of monopolistic competition, can be modeled parsimoniously using a conventional utility function with convex indifference curves defined over the quantities of all p...

Edward Chamberlin: Monopolistic Competition and Pareto Optimality

In treatments of Monopolistic Competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. While their contributions were indeed simultaneously developed, it is inappropriate to treat them as having duplicated each other‟s efforts. Yet it has become customary in many treatments to rega...

Toward a theory of monopolistic competition

We propose a general model of monopolistic competition, which encompasses existing models while being flexible enough to take into account new demand and competition features. The basic tool we use to study the market outcome is the elasticity of substitution at a symmetric consumption pattern, which depends on both the per capita consumption and the total mass of varieties. We impose intuitive...

“Monopolistic competition and trade: Does the theory carry any empirical ‘weight’?”