increasing returns and strategic behavior:the worker/firm ratio
AbstractThis article presents a model of an increasing returns economy in which each agent is allowed to choose his occupation; he can be a worker or an employer. It is shown that as the number of agents increases to infinity, the proportion of employers in the population approaches zero. A large economy can be a competitive economy, a natural oligopoly, or a natural monopoly, depending upon the asymptotic significance of scale economies. Replication does not eliminate the per capita welfare loss due to imperfect competition in the natural oligopoly case. The asymptotic behavior of income per head and its functional distribution are also discussed.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0211022.
Date of creation: 12 Nov 2002
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increasing returns to scale; firm size;
Other versions of this item:
- Spyros Vassilaikis, 1989. "Increasing Returns and Strategic Behavior: The Worker-Firm Ratio," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 622-636, Winter.
- L - Industrial Organization
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- NEP-ALL-2002-11-18 (All new papers)
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