1,720,975 research outputs found
The AD-AS Model and Its Solutions: Some New Results in a Disequilibrium Perspective
No full textThis paper discusses the logical foundation and the solutions of a microfounded aggregate demand - aggregate supply model under the disequilibrium hypothesis. We first show that a) the latter hypothesis is the only one ensuring model consistent expectations and that b) price predetermination, more than price flexibility, should be embodied in an AD-AS framework. Then we develop a full AD-AS scheme, both under excess supply and excess demand for labor. We prove that in the latter case no well defined equilibrium exists. Finally, we discuss stability and perform some comparative statics exercises
Income, demand and privatization
Full text linkThe question raised in this paper is whether and how some core features of income distribution, e.g. the income levels or income inequality, should be relevant in the decision to privatize public firms. The paper provides a first answer in the framework of mixed oligopoly theory. In particular, we show that the scope for privatization is widened when the market is poorer, and when incomes become more concentrated. These unexpected results are accounted for in terms of the way distributional shocks alter the allocative inefficiency of imperfectly competitive markets
The Price Index Effect and Macroeconomic Inefficiency
No full textIn the Dixit-Stiglitz model of monopolistic competition the espects of individual pricing decisions on the aggregate price index are neglected.
This paper studies the implications of this approximation in terms of the efficiency of macroeconomic equilibria. We show that allowing for the price-index espect, makes the degree of inefficiency positively correlated with the number of agents; it also reduces the scope for New Keynesian outcomes, such as price rigidity and multiple equilibria
Quantity competition, endogenous motives and behavioral heterogeneity
No full textThe paper shows that strategic quantity competition can be characterized
by behavioral heterogeneity, once competing firms are allowed in a
pre-market stage to optimally choose the behavioral rule they will follow in
their strategic choice of quantities. In particular, partitions of the population
of identical firms in which some of them are profit maximizers while others follow
an alternative criterion, turn out to be deviation-proof equilibria both in
simultaneous and sequential game structures. Our findings that in a strategic
framework heterogeneous behavioral rules may be consistent with individual
incentives is a first attempt to provide a game-theoretic microfoundation of
heterogeneity
Privatization in an international mixed oligopoly: The role of product differentiation under price competition
No full textBy developing a linear model in a two-country framework of international price competition, we show how the degree of product differentiation and the cross-country distribution of private firms affect the strategic privatization choices made by governments concerned with their own country's welfare. More particularly, the work points out that sufficiently low product differentiation may lead public ownership to be optimally chosen to restrict competition in the country with the larger number of firms, and privatization to be global welfare enhancing in this case
A Simple Analysis of Price and Output Determination: A Model with Imperfect Competition
No full text--
- …
