Bell Journal of Economics
Опубликовано на портале: 31-03-2003Roger W. Koenker, Martin K. Perry Bell Journal of Economics. 1981. Vol. 12. No. 1. P. 217-232.
This paper generalizes a model of monopolistic competition attributable to Spence (1976). Firms produce symmetrically differentiated products with declining or U-shaped average costs. Free entry drives profits to zero in equilibrium. Spence finds that when firms behave "competitively," in a specific sense, the market equilibrium yields too little product diversity. However, when Spence' s "competitive" behavioral assumption is relaxed, we find that the market may produce excessive diversity; this occurs when product differentiation is weak relative to scale economies of production. We also study two second-best regulatory policies and characterize conditions under which they are potentially effective in improving the market outcome. [Авторский текст]