THE MONOPOLISTIC COMPETITION MODELS: RETAILER’S LEADERSHIP UNDER FREE ENTRANCE
Abstract
We study a model of monopolistic competition of Dixit-Stiglitz type with retailer (intermediary). Retailer-monopolist deals with a continuum of producers and «representative» consumer. The behavior of each producer is described by the linear costs; each producer produces one type of goods («variety») and sets the price of the goods. Preferences of the representative consumer describes by a quadratic utility function that corresponds to the linear demand. The retailer, being a market leader, chooses a number («mass») of producers and retail premium. We study the various variants of the retailer’s behavior under «zero-profit condition» («free entry and exit»: producers are free to enter the market if their profit is positive, and may leave the market, as soon as their profit becomes negative). We study what kind of the retailer’s behavior is most favorable for each of the market players: for the retailer, for the representative consumer, as well as for the society.
About the Authors
S. B. Barabash
Novosibirsk State University of Economics and Management
Russian Federation
Barabash Sergey B., Candidate of Physical and Mathematical Sciences, Associate Professor, Department of Statistics
Russian Federation
Barabash Sergey B., Candidate of Physical and Mathematical Sciences, Associate Professor, Department of Statistics
I. A. Bykadorov
Novosibirsk State University of Economics and Management;
Sobolev Institute of Mathematics SB RAS;
Novosibirsk National Research State University
Russian Federation
Bykadorov Igor A., Candidate of Physical and Mathematical Sciences, Associate Professor, Senior Researcher
Russian Federation
Bykadorov Igor A., Candidate of Physical and Mathematical Sciences, Associate Professor, Senior Researcher
M. V. Pudova
Novosibirsk State University of Economics and Management
Russian Federation
Pudova Marina V., Candidate of Physical and Mathematical Sciences, Associate Professor, Department of Statistics
Russian Federation
Pudova Marina V., Candidate of Physical and Mathematical Sciences, Associate Professor, Department of Statistics
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Review
For citations:
Barabash S.B., Bykadorov I.A., Pudova M.V. THE MONOPOLISTIC COMPETITION MODELS: RETAILER’S LEADERSHIP UNDER FREE ENTRANCE. Vestnik NSUEM. 2016;(4):315-326. (In Russ.)
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