DP11449 Monopolistic competition without apology

Author(s): Jacques-François Thisse, Philip Ushchev
Publication Date: August 2016
Keyword(s): monopolistic competition, oligopoly, product differentiation, the negligibility hypothesis
JEL(s): D43, L11, L13
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=11449

We provide a selective survey of what has been accomplished under the heading of monopolistic competition in industrial organization and other economic fields. Among other things, we argue that monopolistic competition is a market structure in its own right, which encompasses a much broader set-up than the celebrated constant elasticity of substitution (CES) model. Although oligopolistic and monopolistic competition compete for adherents within the economics profession, we show that this dichotomy is, to a large extend, unwarranted.