On monopolistic competition and optimal product diversity: a comment on cost structure and workers' rents

Picard, Pierre;Toulemonde, Eric
(2005)

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  • Picard, PierreUCLouvain
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  • Toulemonde, Eric
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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.
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Picard, P., & Toulemonde, E. (2005). On monopolistic competition and optimal product diversity: a comment on cost structure and workers’ rents (CORE Discussion Papers 2005/16). https://hdl.handle.net/2078.5/32977