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Optimal Product Diversity in an Economy with Search Unemployment

URN to cite this document:
urn:nbn:de:bvb:355-epub-2091
Lingens, Jörg
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Date of publication of this fulltext: 05 Aug 2009 13:22


Abstract

Optimum product diversity is analysed within a model of monopolistic competition and search unemployment. We amend the Pissarides (2000) search model by Dixit-Stiglitz (1977) preferences. Thus, entrepreneurs do not only have to decide whether to offer a vacancy, but also whether to produce quantities of an established or of a new variety. We derive equilibrium in the decentral case and compare ...

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