Monopolistic Competition and Optimum Product Diversity under Firm Heterogeneity
研究了行业内生产率差异如何影响资源配置效率，指出市场势力导致资源错配，需求弹性决定错配程度及市场扩张的福利效应。
Empirical work has drawn attention to the high degree of productivity differences within industries, and its role in resource allocation. This paper examines the allocational efficiency of such markets. Productivity differences introduce two new sources of potential inefficiency: selection of the right distribution of firms and allocation of the right quantities across firms. We show that these considerations impact welfare and policy analysis. Market power across firms leads to distortions in resource allocation. Demand-side elasticities determine how resources are misallocated and when increased competition from market expansion provides welfare gains.