On Equilibrium in Monopolistic Competition with Endogenous Labor

10 Pages Posted: 17 Jun 2020

See all articles by Alexey Kushnir

Alexey Kushnir

Carnegie Mellon University - David A. Tepper School of Business

Alexander Tarasov

National Research University Higher School of Economics

Robertas Zubrickas

University of Bath

Date Written: 2020

Abstract

We consider a model of monopolistic competition with several heterogeneous sectors and endogenous labor supply. For low (high) values of the labor supply elasticity, we show that there is always a unique equilibrium. For medium values of the labor supply elasticity, the set of equilibria (if non-empty) can comprise of several equilibria, with the number of equilibria bounded by the number of sectors.

Keywords: labor elasticity, multiple equilibria, stability

JEL Classification: D430, L130

Suggested Citation

Kushnir, Alexey I. and Tarasov, Alexander and Zubrickas, Robertas, On Equilibrium in Monopolistic Competition with Endogenous Labor (2020). CESifo Working Paper No. 8360, Available at SSRN: https://ssrn.com/abstract=3628948 or http://dx.doi.org/10.2139/ssrn.3628948

Alexey I. Kushnir (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

Alexander Tarasov

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Robertas Zubrickas

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

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