TY - JOUR TI - Product differentiation, monopolistic competition, and public policy T2 - Bell Journal of Economics IS - 1 AB - 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] AU - Koenker, Roger W. AU - Perry, Martin K. UR - http://ecsocman.hse.ru/text/19002982/ PY - 1981 SP - 217-232 M2 - 217 VL - 12 SN - N1 - LA - EN CY - PB - M3 - LB - VL - ER -