International Research Seminar "The boundaries of monopolistic competition approach"

On June 08-15, 2013.

On June 10, 2013.

N.Shestakova

12:00
Public research seminar.
Natalia Shestakova (Research Fellow at Laboratory for International and Regional Economics, GSEM, Ural Federal University; Assistant Professor at Department of Economics, University of Vienna). "Enhancing Competition in Regional Markets by Reducing Firms' Heterogeneity in Costs".

We use a lab experiment to study whether a specific government regulation can promote competition in regional markets. The question is motivated with an empirical observation that local monopolies are widespread, i.e. firms successfully coordinate on which markets to enter. We hypothesize that firms' heterogeneity in costs serve as a coordination design in the underlying entry game. If this is the case, then reducing such a heterogeneity would lead to more competition. A lab experiment is explicitly designed to test this.

The address of the seminar: Conference-hall (3rd floor), b. 47, pr. Rimskogo-Korsakova, Saint Petersburg.

Working language – Russian.

Everyone interested is welcome to attend!

P.Bertoletti

17:00
Public research seminar.
Professor Paolo Bertoletti (Pavia University). "Monopolistic Competition: Alternative Approaches".

I will contrast the results emerging from the standard Dixit and Stiglitz (1977) approach, recently reconsidered by Zhelobodko et al (2012), to the ones that can be derived in the "dual" setting introduced by Bertoletti and Etro (2013), which assumes indirect additivity of preferences. In the latter case a market size increase never affects prices and firms' size, nor it produces any selection effect, but only increases proportionally the number of firms, creating pure gains from variety (as in the CES case). Instead, an increase in individual income increases prices (and more than proportionally the number of varieties), reduces firms' size and creates an antiselection effect if and only if the price elasticity of demand is increasing. I will also present results concerning the case of costly trade in the primal setting from Bertoletti and Epifani (2012).

The address of the seminar: Conference-hall (3rd floor), b. 47, pr. Rimskogo-Korsakova, Saint Petersburg.

Working language – English.

Everyone interested is welcome to attend!

On June 11, 2013.

Ph.Ushchev

I.Sloev

12:00.
Public research seminar.
Senior Research Fellow Philip Ushchev (CMSSE), Senior Research Fellow Igor Sloev (CMSSE). "Do we go shopping downtown or in the `burbs? Why not both?"

We combine spatial and monopolistic competition to study market interactions between downtown retailers and an outlying shopping mall. Consumers shop at either marketplace or at both, and buy each variety in volume. The market solution stems from the interplay between the market expansion effect generated by the overlapping of market areas and the competition effect. Firms' profits increase (decrease) with the entry of local competitors when the former (latter) dominates. Downtown retailers swiftly vanish when the mall is large. A predatory but efficient mall need not be regulated, whereas the regulator must restrict the size of an accommodating mall.

The address of the seminar: Conference-hall (3rd floor), b. 47, pr. Rimskogo-Korsakova, Saint Petersburg.

Working language – English.

Everyone interested is welcome to attend!

P.Epifani

16:00.
Public research seminar.
Associate Professor Paolo Epifani (Bocconi University). "Trade Imbalances and Wage Inequality".

We study, both theoretically and empirically, how trade imbalances affect wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill intensity of exports, in the relative demand for skills and in the skill premium in both countries. We provide robust evidence in support of these predictions using a large panel of countries and a panel of US manufacturing industries observed over the past three decades. Our results suggest that the large and growing North-South trade imbalances arisen over the last three decades may have exacerbated wage inequality worldwide.

The address of the seminar: Conference-hall (3rd floor), b. 47, pr. Rimskogo-Korsakova, Saint Petersburg.

Working language – English.

Everyone interested is welcome to attend!

On June 13, 2013.

M.Parenti

17:00.
Public research seminar.
Assistant Professor of Economics Mathieu Parenti (C.O.R.E., Université Catholique de Louvain). "Monopolistic competition where atoms are “not too big”".

We consider a differentiated market involving a handful of oligopolistic firms and a myriad of monopolistically competitive firms. Under various specifications of preferences, we derive the conditions under which monopolistic pricing is optimal for large firms. We show that there is an upper bound on a firm's "mass" below which a large firm mimics the non-strategic behavior of small firms. Therefore, a positive technological shock can impact firm behavior so that the market structure evolves from monopolistic to oligopolistic competition.

The address of the seminar: Conference-hall (3rd floor), b. 47, pr. Rimskogo-Korsakova, Saint Petersburg.

Working language – English.

Everyone interested is welcome to attend!