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Monopolistic competition without apology

In: Handbook of Game Theory and Industrial Organization, Volume I

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  • Jacques-François Thisse
  • Philip Ushchev

Abstract

We provide a selective survey of what has been accomplished under the heading of monopolistic competition in industrial organization and other economic fields. Among other things, we argue that monopolistic competition is a market structure in its own right, which encompasses a much broader set-up than the celebrated constant elasticity of substitution (CES) model. Although oligopolistic and monopolistic competition compete for adherents within the economics profession, we show that this dichotomy is, to a large extend, unwarranted.

Suggested Citation

  • Jacques-François Thisse & Philip Ushchev, 2018. "Monopolistic competition without apology," Chapters, in: Luis C. Corchón & Marco A. Marini (ed.), Handbook of Game Theory and Industrial Organization, Volume I, chapter 5, pages 93-136, Edward Elgar Publishing.
  • Handle: RePEc:elg:eechap:16873_5
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    5. Matsuyama, Kiminori & Ushchev, Philip, 2022. "Destabilizing effects of market size in the dynamics of innovation," Journal of Economic Theory, Elsevier, vol. 200(C).
    6. d’Aspremont, Claude & Dos Santos Ferreira, Rodolphe, 2020. "Exploiting separability in a multisectoral model of oligopolistic competition," Mathematical Social Sciences, Elsevier, vol. 106(C), pages 51-59.
    7. Kiminori Matsuyama, 2019. "Engel's Law in the Global Economy: Demand‐Induced Patterns of Structural Change, Innovation, and Trade," Econometrica, Econometric Society, vol. 87(2), pages 497-528, March.
    8. Barbara Annicchiarico & Enrico Marvasi, 2018. "Protection for Sale with Price Interactions and Incomplete Pass-Through," CEIS Research Paper 435, Tor Vergata University, CEIS, revised 08 Jun 2018.
    9. Keith Head & Barbara J. Spencer, 2017. "Oligopoly in international trade: Rise, fall and resurgence," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1414-1444, December.
    10. Kushnir, Alexey & Tarasov, Alexander & Zubrickas, Robertas, 2021. "On equilibrium in monopolistic competition with endogenous labor," Economics Letters, Elsevier, vol. 201(C).
    11. Matsuyama, Kiminori, 2017. "Beyond CES: Three Alternative Classes of Flexible Homothetic Demand Systems," CEPR Discussion Papers 12210, C.E.P.R. Discussion Papers.
    12. Schiff, Nathan & Cosman, Jacob & Dai, Tianran, 2023. "Delivery in the city: Differentiated products competition among New York restaurants," Journal of Urban Economics, Elsevier, vol. 134(C).
    13. Philipp J. H. Schröder & Allan Sørensen, 2021. "Specific taxation, asymmetric costs, and endogenous quality," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(5), pages 1022-1051, October.
    14. Kenji Fujiwara, 2018. "The Effects of Entry under the Coexistence of Oligopolistic and Monopolistic Competition," Discussion Paper Series 174, School of Economics, Kwansei Gakuin University, revised Feb 2018.
    15. Plan, Asaf, 2023. "Symmetry in n-player games," Journal of Economic Theory, Elsevier, vol. 207(C).
    16. Annicchiarico, Barbara & Marvasi, Enrico, 2019. "Protection for sale under monopolistic competition: Beyond the CES," European Journal of Political Economy, Elsevier, vol. 60(C).

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    Keywords

    Economics and Finance;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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