Monopolistic Competition and Optimum Product Diversity under Firm Heterogeneity

Dados Bibliográficos

ID10172865
AutoresSwati Dhingra (0000-0001-5468-3415, London School of Economics and Political Science), John Morrow (0000-0002-9995-823X, The King's College)
Ano2018
Volume127
Fascículo1
Páginas196-232
Data de publicação2018-09-20
Peer ReviewedSim
Open AccessNão
TipoARTICLE
PeriódicoJournal of Political Economy (JOURNAL)
Identificadores do periódicoISSN: 0022-3808 • E-ISSN: 1537-534X
EditoraUniversity of Chicago Press (PUBLISHER • US)
DOI10.1086/700732
OpenAlexW185783725
IdiomaEN
Citações recebidas27
Referências citadas43

Empirical work has drawn attention to the high degree of productivity differences within industries and their role in resource allocation. This paper examines the allocational efficiency of such markets. Productivity differences introduce two new margins of potential inefficiency: selection of the right distribution of firms and allocation of the right quantities across firms. We show that these considerations affect welfare and policy analysis, and market power across firms leads to distortions in resource allocation. Demand-side elasticities determine how resources are misallocated and when increased competition from market expansion provides welfare gains

Competition (biology · Diversity (politics · Economics · Industrial organization · Inefficiency · Macroeconomics · Market economy · Market power · Market structure · Microeconomics · Monopolistic competition · Monopoly · Product market · Productivity · Resource allocation · Welfare · Economic Policies and Impacts · Global trade and economics · Merger and Competition Analysis