Entry and Welfare in General Equilibrium With Heterogeneous Firms and Endogenous Markups

• 成果类型: Article; Early Access
• 署名作者: Bagwell, Kyle; Lee, Seung Hoon
• 署名单位: Stanford University; National Bureau of Economic Research; Yonsei University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.70079
• 发表日期: 2026
• 关键词: monopolistic competition; TRADE; optimum; IMPACT

摘要

We analyze market entry efficiency in single- and two-sector closed-economy Melitz-Ottaviano (MO) models without an outside good. Comparing market and second-best outcomes, we find that market entry is efficient in the single-sector model. This efficiency also holds in a symmetric two-sector setting. When sectors have asymmetric demand and the level of asymmetry is sufficiently small, the market yields excessive entry into the high-demand sector. This inefficiency arises from the presence of an additional aggregator in MO preferences.