The industry supply function and the long-run competitive equilibrium with heterogeneous firms

• 成果类型: Article
• 署名作者: Esponda, Ignacio; Pouzo, Demian
• 署名单位: University of California System; University of California Santa Barbara; University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2019.104946
• 发表日期: 2019
• 关键词: Long-run competitive equilibrium; Representative firm

摘要

In developing the theory of long-run competitive equilibrium (LRCE), Marshall (1890) used the notion of a representative firm. The identity of this firm, however, remained unclear. Subsequent theory either focused on the case where all firms are identical or else incorporated heterogeneity but disregarded the notion of a representative firm. Using Hopenhayn's (1992) model of competitive industry dynamics, we extend the theory of LRCE to account for heterogeneous firms and show that the long-run supply function can indeed be characterized as the solution to the minimization of a representative average cost function. (C) 2019 Elsevier Inc. All rights reserved.