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Imperfect competition, technical progress and capital accumulation

Author

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  • Biancamaria d'Onofrio

    (Sapienza University of Rome - Dipartimento di Matematica "Guido Castelnuovo" [Roma I] - UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome])

  • Bertrand Wigniolle

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper explores the consequences of imperfect competition on capital accumulation. The framework is an OLG growth model with altruistic agents. Two types of long run equilibria exist: egoistic or altruistic. We assume both competitive and non-competitive firms exist, the latter being endowed with more productive technology. They behave strategically on the labor market: they take into account the impact of their demand for labor on the equilibrium wage and on their profit. The effect of technical progress for a non-competitive firm depends on the initial productivity of the firm and on the type of steady state (egoistic or altruistic). An increase in the productivity of the most productive firm has a negative impact on capital accumulation in an egoistic steady state, and a positive one in an altruistic steady state. An increase in the productivity of the competitive sector can have various effects on capital accumulation. If the productivity levels of the non-competitive firms are close enough, capital accumulation increases in an egoistic steady state and decreases in an altruistic one. But, the impact of increasing productivity in the competitive sector can be reversed if the productivity of the less productive non-competitive firm is low enough.

Suggested Citation

  • Biancamaria d'Onofrio & Bertrand Wigniolle, 2006. "Imperfect competition, technical progress and capital accumulation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00118568, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00118568
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00118568v2
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    1. Biancamaria D'Onofrio & Bertrand Wigniolle, 2010. "Imperfect competition, technical progress and capital accumulation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(4), pages 355-366, December.

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    More about this item

    Keywords

    imperfect competiton; capital accumulation; technical progress; progrès technique; concurrence imparfaite; accumulation du capital;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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