Market size, occupational self‐selection, sorting, and income inequality
构建了一个异质性代理人垄断竞争模型，研究市场规模如何通过职业自选择和分类影响收入不平等，发现市场规模对企业家比例和收入不平等的影响取决于效用函数的特性。
Abstract We develop a monopolistic competition model with heterogeneous agents who self‐select into occupations (entrepreneurs and workers) depending on innate ability. The effect of market size on the equilibrium occupational structure crucially hinges on properties of the lower tier utility function—its scale elasticity and relative love‐for‐variety. When combined with the underlying ability distribution, the share of entrepreneurs and income inequality can increase or decrease with market size. When extended to allow for the endogenous sorting of mobile agents between cities, numerical examples suggest that sorting may increase inequality within and between cities.