No label defined (Q4389640)

This chapter is the review of issues devoted to modeling of markets with an imperfect competition since classical works of Cournot, Bertrand and Edgeworth. The following considering issues are based on the monopolistic competition concept of Chamberlain (1933) according to which each firm makes the special product and sets it's price aspiring to profit maximization. The basic problems of the review are existence of equilibrium in this market and property of such equilibrium. The issues on this problem are considered with the help of a base model determining in the price space a multi-valued mapping. Existence of the market equilibrium is equivalent to existence of a fixed point of this mapping. The values of this mapping are set by problems of profit maximization for each firm. The profit is expressed through functions of consumer demand which in it's turn is defined by some problem of rational consumption. Effects of the market size and of the goods substitutability on closeness of the monopolistic competition equilibrium to the Walrasian one are investigated. A special section is devoted to models where the set of products is itself endogenous. A significant place is given to the model of general economic equilibrium offered by Negishi (1961, 1972). The last section of the review is devoted to research of macroeconomic problems with the help of models considered. Thus effects of underemployment, underproduction and inefficiency under monopolistic competition demonstrated. The author supplements the exposition of this substantial and difficult problem by own examples. For the entire collection see [Zbl 0889.90001].