MONOPOLISTIC COMPETITION WHEN INCOME MATTERS

• 成果类型: Article
• 署名作者: Bertoletti, Paolo; Etro, Federico
• 署名单位: University of Pavia; Universita Ca Foscari Venezia
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12329
• 发表日期: 2017
• 页码: 1217-1243
• 关键词: endogenous market structures; TRADE; elasticity; variety; models; entry; COSTS; size

摘要

We analyse monopolistic competition when consumers have an indirect utility that is additively separable. This leads to markups depending on income (both in the short and long run) but not on the market size, which generates pricing to market, incomplete pass-through and pure gains from variety for countries that open up to trade. Firms' heterogeneity a la Melitz implies a Darwinian effect of consumers' spending on business creation and a Linderian effect on (endogenous) quality provision. We discuss extensions with an outside good and heterogenous agents, and offer simple and tractable specifications (linear or log-linear) of the demand functions.