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On Monopolistic Competition and Optimal Product Diversity: A Comment on Cost Structure and Workers' Rents


Pierre M. Picard


Centre de Recherche en Économie Appliquée (CREA); Universite du Luxembourg

Eric Toulemonde


Institute for the Study of Labor (IZA); Facultés Universitaires Notre-Dame de la Paix (FUNDP) - Faculty of Economics, Management and Social Sciences
March 2005

CORE Discussion Paper No. 2005/16

Abstract:     
In the Dixit-Stiglitz model of monopolistic competition, entry of firms is socially too small. Other authors have shown that excess entry is also a possibility with other preferences for diversity. We show that the cost structure and workers's rents can also explain excess entry.

Number of Pages in PDF File: 10

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Date posted: February 8, 2006  

Suggested Citation

Picard, Pierre M. and Toulemonde, Eric, On Monopolistic Competition and Optimal Product Diversity: A Comment on Cost Structure and Workers' Rents (March 2005). CORE Discussion Paper No. 2005/16. Available at SSRN: http://ssrn.com/abstract=880398 or http://dx.doi.org/10.2139/ssrn.880398

Contact Information

Pierre M. Picard (Contact Author)
Centre de Recherche en Économie Appliquée (CREA) ( email )
Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg
Universite du Luxembourg
L-1511 Luxembourg
Luxembourg
Eric Toulemonde
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
Facultés Universitaires Notre-Dame de la Paix (FUNDP) - Faculty of Economics, Management and Social Sciences ( email )
Rempart de la Vierge 8
B-5000 Namur
Belgium
+32 81 725 313 (Phone)
+32 81 724 840 (Fax)
Feedback to SSRN (Beta)


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