Personal Income Distribution and Market Structure

13 Pages Posted: 21 Jul 2002

See all articles by Corrado Benassi

Corrado Benassi

University of Bologna

Roberto Cellini

University of Catania - Department of Economics and Business

Alessandra Chirco

Universita di Lecce - Facolta di Economia

Multiple version iconThere are 2 versions of this paper

Date Written: April 2001

Abstract

Income distribution affects demand and its elasticity, and, as a consequence, the optimal behaviour of firms and market equilibrium. This paper focuses on the effects of income polarisation, and presents a model where - for any unimodal density function describing income distribution of the consumers - income polarisation leads to market concentration, i.e., to a smaller number of firms able to survive in the long run, provided that the firms' fixed costs are sufficiently low.

Keywords: Personal income distribution, income dispersion, demand elas-ticity, Cournot model, free-entry equilibrium

JEL Classification: D31, D43

Suggested Citation

Benassi, Corrado and Cellini, Roberto and Chirco, Alessandra, Personal Income Distribution and Market Structure (April 2001). Available at SSRN: https://ssrn.com/abstract=317580 or http://dx.doi.org/10.2139/ssrn.317580

Corrado Benassi

University of Bologna ( email )

Department of Economics
Piazza Scaravilli 2
40126 Bologna
Italy

Roberto Cellini

University of Catania - Department of Economics and Business ( email )

Corso Italia 55
95129 Catania, 95129
Italy
+390957537728 (Phone)
+390957537710 (Fax)

Alessandra Chirco (Contact Author)

Universita di Lecce - Facolta di Economia ( email )

Ecotekne
Via per Monteroni
73100 Lecce
Italy

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