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A Note on Income Polarization and Free-Entry Equilibrium: United States versus European Union

Author

Listed:
  • Benassi, Corrado

    (Dipartimento di Scienze Economiche (Department of Economics) Alma Mater Studiorum - Università di Bologna (University of Bologna))

  • Cellini, Roberto

    (Dipartimento di Economia e Metodi Quantitativi (Department of Economics and Quantitative Methods) Facoltà di Economia (Faculty of Economics) Università degli Studi di Catania)

  • Chirco, Alessandra

    (Dipartimento di Scienze Economiche e Matematico-Statistiche Università degli Studi di Lecce Centro ECOTEKNE)

Abstract

Income polarization and industry concentration (especially in sectors where price competition is supposed to be stiffer) are both generally deemed to be higher in the United States than in the European Union. In this note we provide an interpretation of this evidence by establishing a theoretical link, running from income polarization to industry concentration: the former may decrease the equilibrium number of firms, via its effect on market demand and elasticity within Cournot oligopoly.

Suggested Citation

  • Benassi, Corrado & Cellini, Roberto & Chirco, Alessandra, 2000. "A Note on Income Polarization and Free-Entry Equilibrium: United States versus European Union," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 53(1), pages 15-21.
    • Handle: RePEc:ris:ecoint:0253
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    More about this item

    Keywords

    Oligopoly; Free Entry; Income Polarization;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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