David vs. Goliath
This paper develops a model where monopolistically competitive and oligopolistic firms coexist.The model is characterized by a monopolistically competitive fringe and a few multi-product firmswhich decide to be large or not at equilibrium. Conditions are derived for the coexistence of bothtypes of firms: heterogeneity in production efficiency, captured by economies of scope for large firms,appears as a necessary condition for them to coexist at equilibrium. The entry of a large firm raises theaverage price decreasing thereby consumer surplus despite an increase in the total number of varieties.An application to international trade is considered.
|Date of creation:||Dec 2015|
|Publication status:||Published by:|
|Contact details of provider:|| Postal: Av. F.D., Roosevelt, 39, 1050 Bruxelles|
Phone: (32 2) 650 30 75
Fax: (32 2) 650 44 75
Web page: http://difusion.ulb.ac.be
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ken-Ichi Shimomura & Jacques-François Thisse, 2012.
"Competition among the big and the small,"
RAND Journal of Economics,
RAND Corporation, vol. 43(2), pages 329-347, 06.
- Ken-Ichi Shimomura & Jacques-François Thisse, 2009. "Competition Among the Big and the Small," CREA Discussion Paper Series 09-18, Center for Research in Economic Analysis, University of Luxembourg.
- Ken-Ichi Shimomura & Jacques-François Thisse, 2012. "Competition Among the Big and the Small," Discussion Paper Series DP2012-03, Research Institute for Economics & Business Administration, Kobe University.
- Shimomura, Ken-Ichi & Thisse, Jacques-François, 2009. "Competition Among the Big and the Small," CEPR Discussion Papers 7404, C.E.P.R. Discussion Papers.
- SHIMOMURA, Ken-Ichi & THISSE, Jacques-François, 2009. "Competition among the big and the small," CORE Discussion Papers 2009047, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- SHIMOMURA, Ken-Ichi & THISSE, Jacques-François, 2012. "Competition among the big and the small," CORE Discussion Papers 2012009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gene M. Grossman & Esteban Rossi-Hansberg, 2010. "External Economies and International Trade Redux," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 829-858.
- Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "External Economies and International Trade Redux," NBER Working Papers 14425, National Bureau of Economic Research, Inc.
- Yang, Xiaokai & Heijdra, Ben J, 1993. "Monopolistic Competition and Optimum Product Diversity: Comment," American Economic Review, American Economic Association, vol. 83(1), pages 295-301, March. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eca:wpaper:2013/222886. 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: (Benoit Pauwels)
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.