Events at CERGE-EI
Friday, 5 May, 2023 | 14:00 | Micro Theory Research Seminar
Paolo Bertoletti (University of Milano-Bicocca) "On Entry, Firm Selection and Efficiency under Monopolistic Competition"
University of Milano-Bicocca, Italy
Authors: Paolo Bertoletti, Federico Etro
Abstract: We study monopolistic competition among heterogeneous firms under quasi-linear preferences with an indirectly additive aggregator. Market equilibrium selection of firms and their sizes turn out to be optimal for a family of surplus functions that generate linear, exponential and iso-elastic demands, and the overall allocation is actually efficient for a generalization of the LogSumExp specification. Insufficient entry generally arises in allocations constrained by equilibrium pricing.
