General equilibrium models of monopolistic competition: A new approach

• 成果类型: Article
• 署名作者: Behrens, Kristian; Murata, Yasusada
• 署名单位: Universite Catholique Louvain; Nihon University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2006.10.001
• 发表日期: 2007
• 页码: 776-787
• 关键词: monopolistic competition; general equilibrium; Pro-competitive effects; Competitive limit; continuum model

摘要

We analyze a class of 'large group' Chamberlinian monopolistic competition models by applying different concepts of functional separability to the same set of first-order conditions for utility maximization. We show that multiplicatively quasi-separable (MQS) functions yield 'constant relative risk aversion' (CRRA), and, therefore 'constant elasticity of substitution' (CES), functions, whereas additively quasi-separable (AQS) functions yield 'constant absolute risk aversion' (CARA) functions. We then show that the CARA specification sheds new light on: (i) pro-competitive cffects, i.e., profit-maximizing prices are decreasing in the mass of competing firms; and (ii) a competitive limit, i.e., profit-maximizing prices converge to marginal costs when the mass of competing firms becomes arbitrarily large. (C) 2006 Elsevier Inc. All rights reserved.