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Inequality in models with a competition for market shares


Hefti, Andreas; Teichgräber, Julian (2021). Inequality in models with a competition for market shares. Working paper series / Department of Economics 375, University of Zurich.

Abstract

This paper develops a framework to systematically study how changes in market conditions affect the equilibrium inequality between heterogeneous agents. By stating our setting as a "competition for market shares", we can derive inequality predictions for vastly different competition models. This approach allows us to identify a common structure, e.g., in monopolistic competition, perfect competition, or competition for prizes, that explains why these models deliver similar inequality predictions. We apply our results to problems from trade, competition theory, consumption inequality, political economics and marketing, and relate some of the predicted inequality patterns to empirical evidence.

Abstract

This paper develops a framework to systematically study how changes in market conditions affect the equilibrium inequality between heterogeneous agents. By stating our setting as a "competition for market shares", we can derive inequality predictions for vastly different competition models. This approach allows us to identify a common structure, e.g., in monopolistic competition, perfect competition, or competition for prizes, that explains why these models deliver similar inequality predictions. We apply our results to problems from trade, competition theory, consumption inequality, political economics and marketing, and relate some of the predicted inequality patterns to empirical evidence.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C65, D30, D41, E10, L11, M37
Uncontrolled Keywords:Inequality analysis, market shares, power functions, monopolistic competition, perfect competition competition for prizes
Language:English
Date:January 2021
Deposited On:06 Jan 2021 16:00
Last Modified:06 Jan 2021 16:01
Series Name:Working paper series / Department of Economics
Number of Pages:20
ISSN:1664-705X
OA Status:Green
Official URL:https://www.econ.uzh.ch/en/research/workingpapers.html?paper-id=1057

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