Market equilibrium in interregional trade models under monopolistic competition
https://doi.org/10.34020/2073-6495-2022-3-183-203
Abstract
We study a homogeneous model of interregional trade under monopolistic competition of producers with additively separable utility and linear production costs. The mass of firms (“the length of the product line”) is determined endogenously, from conditions of free entry. We obtain the local comparative statics of the market equilibrium with respect to transport costs of “iceberg types”. Particular attention is paid to situations of free trade and autarky. We establish the following counter-intuitive result: under high transport costs, trade liberalization can decrease public welfare.
Supporting agencies: The study was carried out within the framework of an internal grant of the SIU RANEPA, April–June 2022. The authors consider it their pleasant duty to express their sincere gratitude to their colleagues at the REC “Digital Transformation of the Economy” and especially the Department of Business Statistics and Analytics of the SIU RANEPA for useful discussions.
About the Authors
I. A. Bykadorov
Siberian Institute of Management – branch of the Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Bykadorov Igor A. – Candidate of Physical and Mathematical Sciences, Associate Professor, Associate Professor of the Department of Business Analytics and Statistics,
Novosibirsk
Yu. N. Ismaiylova
Siberian Institute of Management – branch of the Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Ismaiylova Yuliya N. – Candidate of Economic Sciences, Associate Professor of the Department of Business Analytics and Statistics
Novosibirsk
M. V. Pudova
Siberian Institute of Management – branch of the Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Pudova Marina V. – Candidate of Physical and Mathematical Sciences, Associate Professor of the Department of Business Analytics and Statistics
Novosibirsk
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Review
For citations:
Bykadorov I.A., Ismaiylova Yu.N., Pudova M.V. Market equilibrium in interregional trade models under monopolistic competition. Vestnik NSUEM. 2022;(3):183-203. (In Russ.) https://doi.org/10.34020/2073-6495-2022-3-183-203
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