Picard, Pierre M.; Toulemonde, Eric - Centre de Recherche en Économie Appliquée (CREA), … - 2008
In the Dixit-Stiglitz model of monopolistic competition, entry of firms is socially too small. Other authors have shown that excess entry is also a possibility with other preferences for diversity. We show that workers' rents also contribute to explain excess entry through a general equilibrium...