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Poverty, Competition, Democracy and Ownership: a General Equilibrium Model with Vertical Preferences

Author

Listed:
  • Amani Kahloul
  • Rim Lahmandi-Ayed

    (UR MASE - Modélisation et Analyse Statistique et Economique - ESSAIT - Ecole Supérieure de la Statistique et de l'Analyse de l'Information - UCAR - Université de Carthage (Tunisie))

  • Hejer Lasram

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We consider a general equilibrium model where individuals are at the same time workers, consumers and shareholders, with two possible ownership structures: egalitarian where all individuals share equally the firm's (firms') capital and concentrated where the owners of the firm(s) are negligible w.r.t the total population; and two possible market structures: Monopoly and Duopoly. The questions are, whether more competition generates more or less poverty for a given ownership structure; and whether a democratic choice between Monopoly and Duopoly leads to the alternative with less poverty. We consider four poverty indicators based respectively on Per Capita Income (PCI), Income Floor, Poorest and Income-Poor Population Size. When the ownership is concentrated, we show that Duopoly generates less poverty than Monopoly and that democratic choice between the two alternatives alleviates poverty according to all indicators apart from PCI. When the ownership is egalitarian, Duopoly may generate more or less poverty than Monopoly and democratic choice alleviates poverty regarding at least one poverty indicator and worsens poverty regarding at least another one, the four poverty indicators never converging. An empirical study on the effect of competition on poverty supports to some extent our theoretical findings. JEL Classification: I32, J4, L13. * We are grateful to Didier Laussel for his careful reading of a previous draft and his very helpful suggestions, and to Hafedh Bouakez for his interesting comments. Remaining imperfections are only ours.

Suggested Citation

  • Amani Kahloul & Rim Lahmandi-Ayed & Hejer Lasram, 2018. "Poverty, Competition, Democracy and Ownership: a General Equilibrium Model with Vertical Preferences ," Working Papers hal-01892192, HAL.
  • Handle: RePEc:hal:wpaper:hal-01892192
    Note: View the original document on HAL open archive server: https://hal.science/hal-01892192
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    References listed on IDEAS

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    12. Amani Kahloul & Rim Lahmandi-Ayed & Hejer Lasram & Didier Laussel, 2017. "Democracy and competition: Vertical differentiation and labor in a general equilibrium model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(4), pages 860-874, August.
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    Cited by:

    1. Hend Ghazzai & Wided Hemissi & Rim Lahmandi-Ayed & Sana Mami Kefi, 2021. "Note on Democracy and Competition: The Role of Ownership Structure in a General Equilibrium Model with Vertical Preferences," Revue d'économie politique, Dalloz, vol. 131(2), pages 249-261.
    2. Rim Lahmandi‐Ayed & Hejer Lasram & Didier Laussel, 2021. "Is partial privatization of universities a solution for higher education?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(6), pages 1174-1198, December.
    3. Rim Lahmandi-Ayed & Hejer Lasram & Didier Laussel, 2020. "Is partial privatization of universities a solution for higher education? A successive monopolies model," Working Papers hal-02988323, HAL.
    4. Rabah Amir & Hend Ghazzai & Rim Lahmandi-Ayed, 2023. "On the political economy of economic integration," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 61(1), pages 61-100, July.

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    More about this item

    Keywords

    Vertical differentiation; general equilibrium; poverty; democracy; competition; ownership structure;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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