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Personal Income Distribution and Market Structure

Author

Listed:
  • Benassi Corrado

    (Dipartimento di Scienze Economiche, Università di Bologna, Bologna, Italy)

  • Cellini Roberto

    (Facoltà di Economia, Università di Catania, Catania, Italy)

  • Chirco Alessandra

    (Facoltà di Economia, Università di Lecce, Lecce, Italy)

Abstract

Income distribution affects market demand and its elasticity, and, as a consequence, the optimal behaviour of firms and market equilibrium. This paper focuses on the effects of income polarization, and presents a model where ± for any unimodal density function describing income distribution of the consumers ± income polarization leads to market concentration, i.e., to a smaller number of firms able to survive in the long run, provided that the firms' fixed costs are sufficiently low.

Suggested Citation

  • Benassi Corrado & Cellini Roberto & Chirco Alessandra, 2002. "Personal Income Distribution and Market Structure," German Economic Review, De Gruyter, vol. 3(3), pages 327-338, August.
    • Handle: RePEc:bpj:germec:v:3:y:2002:i:3:p:327-338
    DOI: 10.1111/1468-0475.00062
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    References listed on IDEAS

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    Cited by:

    1. Corrado Benassi & Alessandra Chirco, 2004. "Income Distribution, Price Elasticity and the ‘Robinson Effect’," Manchester School, University of Manchester, vol. 72(5), pages 591-600, September.
    2. Osharin Alexander & Verbus Valery, 2015. "Heterogeneous consumers and market structure in a monopolistically competitive setting," EERC Working Paper Series 15/03e, EERC Research Network, Russia and CIS.

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