Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, July 14, 2020

On Equilibrium in Monopolistic Competition with Endogenous Labor

On Equilibrium in Monopolistic Competition with Endogenous Labor

Alexey Kushnir

Carnegie Mellon University - David A. Tepper School of Business

Alexander Tarasov

National Research University Higher School of Economics

Robertas Zubrickas

University of Bath

Abstract

We consider a model of monopolistic competition with several heterogeneous sectors and endogenous labor supply. For low (high) values of the labor supply elasticity, we show that there is always a unique equilibrium. For medium values of the labor supply elasticity, the set of equilibria (if non-empty) can comprise of several equilibria, with the number of equilibria bounded by the number of sectors.

https://lawprofessors.typepad.com/antitrustprof_blog/2020/07/on-equilibrium-in-monopolistic-competition-with-endogenous-labor.html

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