Firms' Entry, Imperfect Competition and Regulation
In this paper we try to build a macro model of imperfect competition where the number of firms is endogenous. In particular, the product market works as as a Cournot oligopoly, while in the labour markets the determination of wages is influenced by the presence of unions. Moreover, the number of firms and its equilibrium level are determined through a costly entry process, so that firms enter the market as long as expected profits are enough to cover entry costs. This mechanism allows to determine the equilibrium number of firms and to study its properties. Once we have determined this, we may examine the effects of imperfect competition in both the short and long run and we can evaluate the consequences of (de)regulation policies on both the time horizons.
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