Journal article
Irrationality and monopolistic competition: An evolutionary approach
Abstract
This paper shows that a monopolistically competitive equilibrium can evolve without purposive profit maximization. Specifically, this paper formulates a precise evolutionary dynamic model of an industry where there is continuous entry of firms that randomly select their output levels on entry and fix their output levels thereafter. Firms exit the industry if they fail to pass the survival test of making nonnegative wealth. This paper shows that …
Authors
Luo GY
Journal
European Economic Review, Vol. 53, No. 5, pp. 512–526
Publisher
Elsevier
Publication Date
July 2009
DOI
10.1016/j.euroecorev.2008.09.001
ISSN
0014-2921