The 148th meeting jointly organized with International Public Policy Seminar
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Date | 2022.11.25 Fri 13:30 - 15:00 |
Contact | MIKAMI, Institute of Social Science, The University of Tokyo 03-5841-4936 |
The Osaka Workshop on Economics of Institutions and Organizations, OEIO, meets every month to exchange research ideas on institutional and organizational economics. Participants include both people specialized in theoretical research and those in empirical research. Topics of meetings might be about microeconomic theory, macroeconomic theory, or economic history..., whatever on institutional and organizational economics.
Date: Friday, November 25, 2022 13:30 to 15:00
Place: Will be held online
Presenter: Kazuhiro Yamamoto, Graduate School/School of Economics, Osaka University
Title: "A welfare analysis of a monocentric city model under monopolistic competition with heterogeneous firms and variable elasticity of substitution preference"
Abstract: We study the equilibrium and the optimal resource allocation in a monocentric city model under monopolistic competition among heterogeneous firms with a variable elasticity of substitution (VES) preference. First, we show that in an equilibrium, the output of firms with high productivity is under-produced and the output of firms with low productivity is over-produced. Also, firms with too low productivity remain in the market. This is the market distortion brought about by firm heterogeneity and VES preference. Second, an increase in city size increases the output per firm with high productivity, while it decreases the output per firm with low productivity. Thus, the increase in city size acts to correct the market distortions introduced by firm heterogeneity and VES preference.