Dixit-Stiglitz-Krugman Model with Nonlinear Costs

Ivan Belyaev, Igor Bykadorov

Research output: Chapter in Book/Report/Conference proceedingConference contributionResearchpeer-review

Abstract

We study the market equilibrium in international trade monopolistic competition model a‘la Dixit-Stiglitz-Krugman with homogeneous firms. The utility of consumers are additive separable. Transport costs are of “iceberg type.” The only production factor is labor. The concrete functional form of sub-utility function is assumed unknown. Thus, it is not possible to get the equilibrium in closed form. We examine the local symmetric comparative statics of consumption, prices, firms masses and firms sizes with respect to transport costs. For linear production costs, the results about equilibria near free trade and autarky are known. We show that many of these results are true for the case of non-linear production costs.

Original languageEnglish
Title of host publicationMathematical Optimization Theory and Operations Research - 19th International Conference, MOTOR 2020, Proceedings
EditorsAlexander Kononov, Michael Khachay, Valery A. Kalyagin, Panos Pardalos
PublisherSpringer Gabler
Pages157-169
Number of pages13
ISBN (Print)9783030499877
DOIs
Publication statusPublished - 1 Jan 2020
Event19th International Conference on Mathematical Optimization Theory and Operations Research, MOTOR 2020 - Novosibirsk, Russian Federation
Duration: 6 Jul 202010 Jul 2020

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume12095 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Conference

Conference19th International Conference on Mathematical Optimization Theory and Operations Research, MOTOR 2020
CountryRussian Federation
CityNovosibirsk
Period06.07.202010.07.2020

Keywords

  • Autarky
  • Comparative statics
  • Dixit-Stiglitz-Krugman Model
  • Free trade
  • Market equilibrium

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