On the Dixit-Stiglitz Model of Monopolistic Competition as Enforcement Mechanisms
We examine two variants of the monopolistic competition model of Dixit and Stiglitz (1993). One is a simple general equilibrium model with n produced monopolistic goods and a numeraire good, the other in an "enlarged model", that includes labor time an an addiitonal good. In the case of alarge n, it is reasonable to consider in both variants only the direct effects of individual pricing decisions on demand, neglecting all indirect effects, either through the price index or through income. However, for other cases, we show that all these indirect effects can be taken into account and explicit solutions obtained. The derivations are even simpler for the enlarged model.
|Date of creation:||01 Dec 1994|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1994067. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.