A Non-Walrasian General Equilibrium Model with Monopolistic Competition and Wage Bargaining
In a general equilibrium framework, this paper tries to reproduce an important stylized fact of real economies: firms set prices under demand uncertainty while consumption decisions are taken when prices are already known. Under these assumptions, there is place for a quantity rationing equilibrium since preferences are revealed when prices are already set and market-clearing can not be attained through changes in prices. "Demand heterogeneity" is introduced in the model and related to "demand uncertainty:" when firms set prices, their own market shares are not known with certainty, even if aggregate demand and the distribution of market shares are common knowledge. The main properties of the aggregate equilibrium are: a) some markets are demand constrained while other markets are supply constrained, b) aggregate production is smaller than aggregate demand and full-employment output, c) there is (involuntary) unemployment, and d) there is a positive spill-over effect from constrained to unconstrained demands.
Volume (Year): (1995)
Issue (Month): 37-38 ()
|Contact details of provider:|| Postal: |
Web page: http://annales.ensae.fr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:1995:i:37-38:p:12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Gary-Bobo)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.