Abstract
This paper proposes a model of a continuum of industries in which some industries are monopolistically competitive, the others are oligopolistic, and they interact in a labor market. We use this model to examine the effects of entry of oligopolistic firms. We show that this raises the equilibrium wage and induces exit of monopolistically competitive firms. Then, we find that the profits of each oligopolistic firm and the whole oligopolistic industry decrease. Finally, we establish that if the elasticity of substitution is the same in all industries, welfare improves as a result of an increase in the oligopolistic firms.
Acknowledgements
I thank two anonymous referees for providing many useful comments and suggestions. Any remaining errors are my own responsibility.
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Supplementary Material
The online version of this article offers supplementary material (DOI:https://doi.org/10.1515/bejte-2017-0161).
© 2020 Walter de Gruyter GmbH, Berlin/Boston
Artikel in diesem Heft
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- Managerial Delegation of Competing Vertical Chains with Vertical Externality
- Fiat Money as a Public Signal, Medium of Exchange, and Punishment
- Education Spending, Fertility Shocks and Generational Consumption Risk
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- Pretrial Beliefs and Verdict Accuracy: Costly Juror Effort and Free Riding
- Product R&D Coopetition and Firm Performance
- A Model of Inequality Aversion and Private Provision of Public Goods
- Managerial Accountability Under Yardstick Competition
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Artikel in diesem Heft
- Research Articles
- The Effects of Entry when Monopolistic Competition and Oligopoly Coexist
- Managerial Delegation of Competing Vertical Chains with Vertical Externality
- Fiat Money as a Public Signal, Medium of Exchange, and Punishment
- Education Spending, Fertility Shocks and Generational Consumption Risk
- Should the Talk be Cheap in Contribution Games?
- College Assignment Problems Under Constrained Choice, Private Preferences, and Risk Aversion
- Competition with Nonexclusive Contracts: Tackling the Hold-Up Problem
- Endogenous Authority and Enforcement in Public Goods Games
- Disequilibrium Trade in a Large Market for an Indivisible Good
- Pretrial Beliefs and Verdict Accuracy: Costly Juror Effort and Free Riding
- Product R&D Coopetition and Firm Performance
- A Model of Inequality Aversion and Private Provision of Public Goods
- Managerial Accountability Under Yardstick Competition
- On the Equilibrium Uniqueness in Cournot Competition with Demand Uncertainty