The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality
We study the monopolistic competition model of Dixit–Stiglitz–Krugman with additive separable utility and transport costs of “iceberg types”. The production costs are not necessary linear. We study two concepts: market equilibrium and social optimality. There are well-known facts in the closed econo...
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-10-01
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| Series: | Mathematics |
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| Online Access: | https://www.mdpi.com/2227-7390/11/19/4172 |
| _version_ | 1797575497819881472 |
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| author | Igor Bykadorov |
| author_facet | Igor Bykadorov |
| author_sort | Igor Bykadorov |
| collection | DOAJ |
| description | We study the monopolistic competition model of Dixit–Stiglitz–Krugman with additive separable utility and transport costs of “iceberg types”. The production costs are not necessary linear. We study two concepts: market equilibrium and social optimality. There are well-known facts in the closed economy under monopolistic competition: (1) “in market equilibrium, the elasticity of revenue equals the elasticity of total costs” and (2) “in social optimality, the elasticity of utility equals the elasticity of total costs”. Moreover, earlier Prof. Sergey Kokovin (HSE University, Russia) generated the idea that (3) “the search for equilibrium is equivalent to the problem of optimization, but revenue, not utility”. For the case of several countries, it turns out that facts (1) and (2) and prediction (3) remain mostly true. |
| first_indexed | 2024-03-10T21:39:20Z |
| format | Article |
| id | doaj.art-0e551afb2f5840e2a301348684f15efc |
| institution | Directory Open Access Journal |
| issn | 2227-7390 |
| language | English |
| last_indexed | 2024-03-10T21:39:20Z |
| publishDate | 2023-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj.art-0e551afb2f5840e2a301348684f15efc2023-11-19T14:44:19ZengMDPI AGMathematics2227-73902023-10-011119417210.3390/math11194172The Open Monopolistic Competition Models: Market Equilibrium and Social OptimalityIgor Bykadorov0Sobolev Institute of Mathematics, Siberian Branch of Russian Academy of Sciences, 4 Koptyug Ave., 630090 Novosibirsk, RussiaWe study the monopolistic competition model of Dixit–Stiglitz–Krugman with additive separable utility and transport costs of “iceberg types”. The production costs are not necessary linear. We study two concepts: market equilibrium and social optimality. There are well-known facts in the closed economy under monopolistic competition: (1) “in market equilibrium, the elasticity of revenue equals the elasticity of total costs” and (2) “in social optimality, the elasticity of utility equals the elasticity of total costs”. Moreover, earlier Prof. Sergey Kokovin (HSE University, Russia) generated the idea that (3) “the search for equilibrium is equivalent to the problem of optimization, but revenue, not utility”. For the case of several countries, it turns out that facts (1) and (2) and prediction (3) remain mostly true.https://www.mdpi.com/2227-7390/11/19/4172monopolistic competitioninternational trademarket equilibriumsocial optimality |
| spellingShingle | Igor Bykadorov The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality Mathematics monopolistic competition international trade market equilibrium social optimality |
| title | The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality |
| title_full | The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality |
| title_fullStr | The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality |
| title_full_unstemmed | The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality |
| title_short | The Open Monopolistic Competition Models: Market Equilibrium and Social Optimality |
| title_sort | open monopolistic competition models market equilibrium and social optimality |
| topic | monopolistic competition international trade market equilibrium social optimality |
| url | https://www.mdpi.com/2227-7390/11/19/4172 |
| work_keys_str_mv | AT igorbykadorov theopenmonopolisticcompetitionmodelsmarketequilibriumandsocialoptimality AT igorbykadorov openmonopolisticcompetitionmodelsmarketequilibriumandsocialoptimality |