IDEAS home Printed from https://ideas.repec.org/p/eer/wpalle/13-08e.html
   My bibliography  Save this paper

Investments in Productivity under Monopolistic Competition: Large Market Advantage

Author

Listed:
  • Bykadorov Igor
  • Kokovin Sergey
  • Zhelobodko Evgeny

Abstract

We study endogenous productivity in monopolistic competition with general (unspecified) utility/investment functions; a bigger investment yields smaller marginal cost. Then the equilibrium investments increase with the market size if and only if the utility (realistically) generates increasing demand elasticity and this increase can be abrupt (threshold effect). However, this technological advantage of a bigger country/city is different from a welfare advantage. To fit social optimality conditions, a governmental taxation/subsidy should be non-linear. Our extensions include comparisons among industries with different characteristics, exogenous technological progress, heterogeneous firms.

Suggested Citation

  • Bykadorov Igor & Kokovin Sergey & Zhelobodko Evgeny, 2013. "Investments in Productivity under Monopolistic Competition: Large Market Advantage," EERC Working Paper Series 13/08e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:13/08e
    as

    Download full text from publisher

    File URL: http://eercnetwork.com/default/download/creater/working_papers/file/e932a5c8033bb464d2fde6ae6781f47e754bed13.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Igor A. Bykadorov & Alexey A. Gorn & Sergey G. Kokovin & Evgeny V. Zhelobodko, 2014. "Losses From Trade In Krugman’s Model: Almost Impossible," HSE Working papers WP BRP 61/EC/2014, National Research University Higher School of Economics.
    2. Bykadorov, Igor & Kokovin, Sergey, 2017. "Can a larger market foster R&D under monopolistic competition with variable mark-ups?," Research in Economics, Elsevier, vol. 71(4), pages 663-674.
    3. Bykadorov, Igor & Gorn, Alexey & Kokovin, Sergey & Zhelobodko, Evgeny, 2015. "Why are losses from trade unlikely?," Economics Letters, Elsevier, vol. 129(C), pages 35-38.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eer:wpalle:13/08e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anton Pashchenko (email available below). General contact details of provider: http://www.eercnetwork.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.