Monopolistic competition with investments in productivity
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We consider a monopolistic competition model with the endogenous choice of technology. We study the impact of technological innovation on the equilibrium and socially optimal variables. We obtained the comparative statics of the equilibrium and socially optimal solutions with respect to the technological innovation parameter and utility level parameter.
KeywordsMonopolistic competition Investments in productivity Relative love for variety Comparative statics
The author would like to thank Jacques-Francois Thisse for guiding and advising, Kristian Behrens, Richard Ericson, Federico Etro, Sergey Kokovin, Peter Neary, Alexander Shepotylo, Philip Ushchev and Natalya Volchkova for valuable comments, Evgeny Zhelobodko (1973–2013), Irina Antoshchenkova and Ekaterina Shelkova for participation in the early stages of this research, the anonymous referees for valuable comments.
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