DECOUPLING THE CES DISTRIBUTION CIRCLE WITH QUALITY AND BEYOND: EQUILIBRIUM DISTRIBUTIONS AND THE CES-LOGIT NEXUS

• 成果类型: Article
• 署名作者: Anderson, Simon P.; de Palma, Andre
• 署名单位: Universite Paris Saclay; University of Virginia; Institut Polytechnique de Paris; ENSAE Paris; Universite Paris Saclay
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueaa001
• 发表日期: 2020
• 页码: 911-936
• 关键词: monopolistic competition; TRADE; prices; gains; size

摘要

We show for CES demands with heterogeneous productivities that profit, revenue and output distributions lie in the same closed power family as the productivity distribution (e.g., the 'Pareto circle'). The price distribution lies in the inverse power family. Equilibrium distribution shapes are linked by linear relations between their density elasticities. Introducing product quality decouples the CES circle, and reconciles Pareto price and Pareto sales revenue distributions. We use discrete choice underpinnings to find variable mark-ups for a more flexible demand formulation bridging CES to logit and beyond. For logit demand, exponential (resp. normal) quality-cost distributions generate Pareto (log-normal) economic size distributions.