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Welfare, competition, specialization and growth

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  • Onori, Daria

Abstract

In this paper we consider a model of horizontal differentiation with a quite general production function and derive the closed form solutions for the level of the variables in the decentralized economy and in the social planner case. This enables us to analyze how consumers’ welfare varies in terms of the degree of competition and the degree of returns to specialization. We find that welfare is increasing in the degree of returns to specialization both in the market economy and in the centralized economy and the decentralized economy's welfare is a bell-shaped function of the degree of competition.

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Bibliographic Info

Article provided by Elsevier in its journal Research in Economics.

Volume (Year): 66 (2012)
Issue (Month): 4 ()
Pages: 355-370

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Handle: RePEc:eee:reecon:v:66:y:2012:i:4:p:355-370

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Web page: http://www.elsevier.com/locate/inca/622941

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Keywords: Closed form solutions; Welfare; Competition; Returns to specialization;

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Cited by:
  1. Piotr Bialowolski & Dorota Weziak-Bialowolska, 2014. "The Index of Household Financial Condition, Combining Subjective and Objective Indicators: An Appraisal of Italian Households," Social Indicators Research, Springer, vol. 118(1), pages 365-385, August.

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