Working Paper
On Equilibrium in Monopolistic Competition with Endogenous Labor
Alexey Kushnir, Alexander Tarasov, Robertas Zubrickas
CESifo, Munich, 2020
CESifo Working Paper No. 8360
CESifo, Munich, 2020
CESifo Working Paper No. 8360
We consider a model of monopolistic competition with several heterogeneous sectors and endogenous labor supply. For low (high) values of the labor supply elasticity, we show that there is always a unique equilibrium. For medium values of the labor supply elasticity, the set of equilibria (if non-empty) can comprise of several equilibria, with the number of equilibria bounded by the number of sectors.
CESifo Category
Industrial Organisation
Industrial Organisation
Keywords: labor elasticity, multiple equilibria, stability
JEL Classification: D430, L130