A NEW JUSTIFICATION OF MONOPOLISTIC COMPETITION

Authors
GUTH W HUCK S
Citation
W. Guth et S. Huck, A NEW JUSTIFICATION OF MONOPOLISTIC COMPETITION, Economics letters, 57(2), 1997, pp. 177-182
Citations number
5
Journal title
Economics letters → ACNP
ISSN journal
01651765
Volume
57
Issue
2
Year of publication
1997
Pages
177 - 182
Database
ISI
SICI code
0165-1765(1997)57:2<177:ANJOMC>2.0.ZU;2-2
Abstract
This note offers an evolutionary justification for monopolistic compet ition: Sellers act on a symmetric heterogenous market, entertain belie fs about the market structure, and maximize conjectural profit functio ns. We show that conjectural profit functions neglecting strategic int erdependence are (neutrally) evolutionarily stable. (C) 1997 Elsevier Science S.A.