Events at CERGE-EI

Friday, 5 May, 2023 | 14:00 | Micro Theory Research Seminar

Paolo Bertoletti (University of Milano-Bicocca) "Monopolistic Competition: Entry, Firm Selection and Efficiency"

Prof. Paolo Bertoletti

University of Milano-Bicocca, Italy

Join online: (Passcode: 5673)

Authors: Paolo Bertoletti, Federico Etro

Abstract: We study monopolistic competition among heterogeneous firms under quasi-linear preferences with an indirectly additive aggregator. Market equilibrium selection of firms and their sizes turn out to be optimal for a family of surplus functions that generate linear, exponential and iso-elastic demands, and the overall allocation is actually efficient for a generalization of the LogSumExp specification. Insufficient entry generally arises in allocations constrained by equilibrium pricing.

JEL Classification: D11, D43, L11
Keywords: Monopolistic competition, Quasi-linear preferences, Indirectly additive preferences, Heterogeneous firms, Insufficient Entry

Full Text: Monopolistic Competition: Entry, Firm Selection and Efficiency