The industry supply function and the long-run competitive equilibrium with heterogeneous firms

DOI10.1016/J.JET.2019.104946zbMATH1426.91155OpenAlexW2980171225WikidataQ127112352MaRDI QIDQ2334136FDOQ2334136

Authors Ignacio Esponda, Demian Pouzo

Publication date 7 November 2019

Published in Journal of Economic Theory (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1612.09549

zbMATH Keywords

long-run competitive equilibriumrepresentative firm

Mathematics Subject Classification ID

Special types of economic equilibria (91B52)

Abstract: In developing the theory of long-run competitive equilibrium (LRCE), Marshall (1890) used the notion of a representative firm. The identity of this firm, however, remained unclear. Subsequent theory either focused on the case where all firms are identical or else incorporated heterogeneity but disregarded the notion of a representative firm. Using Hopenhayn's (1992) model of competitive industry dynamics, we extend the theory of LRCE to account for heterogeneous firms and show that the long-run supply function can indeed be characterized as the solution to the minimization of a representative average cost function.

Recommendations

• scientific article; zbMATH DE number 2183055
• On supply function equilibria in a mixed duopoly
• A General Equilibrium Model for Industries with Price and Service Competition
• Supply Function Equilibria in Oligopoly under Uncertainty
• Industry equilibrium and welfare in monopolistic competition under uncertainty
• On ``sectoral supply functions and some critical roles for the consumptions and leisure arbitrages in the stability properties of a competitive equilibrium with heterogeneous goods
• Monopolistic competition and the stability of industrial equilibrium
• Quasi-competitiveness in the Cournot model with heterogeneous firms
• Finding Supply Function Equilibria with Asymmetric Firms
• Industry dynamics: foundations for models with an infinite number of firms

Cites work

• Entry, Exit, and firm Dynamics in Long Run Equilibrium
• Investment Under Uncertainty
• Markov-Perfect Industry Dynamics: A Framework for Empirical Work
• Selection and the Evolution of Industry
• THE TWO‐SECTOR VON THÜNEN ORIGINAL MARGINAL PRODUCTIVITY MODEL OF CAPITAL; AND BEYOND: COMMENT
• The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity

Cited in

(2)

• Nonparametric instrumental regression with two-way fixed effects
• Firm and industry level profit efficiency analysis using absolute and uniform shadow prices

This page was built for publication: The industry supply function and the long-run competitive equilibrium with heterogeneous firms

Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q2334136)