Why are losses from trade unlikely?
Examining a standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion. Two numerical examples explain the losses (under unrealistic elasticities). •The...
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| Veröffentlicht in: | Economics letters 2015-04, Vol.129, p.35-38 |
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| container_title | Economics letters |
| container_volume | 129 |
| creator | Bykadorov, Igor Gorn, Alexey Kokovin, Sergey Zhelobodko, Evgeny |
| description | Examining a standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion. Two numerical examples explain the losses (under unrealistic elasticities).
•The general New Trade model with variable costs/substitution is explored.•The necessary and sufficient condition for trade losses is found.•The condition means “misaligned” preferences under specific costs.•Numerical examples show that this case is possible but unlikely. |
| doi_str_mv | 10.1016/j.econlet.2015.02.003 |
| format | Article |
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•The general New Trade model with variable costs/substitution is explored.•The necessary and sufficient condition for trade losses is found.•The condition means “misaligned” preferences under specific costs.•Numerical examples show that this case is possible but unlikely.</description><subject>Competition</subject><subject>Demand elasticity</subject><subject>Economic losses</subject><subject>Economic models</subject><subject>Economic theory</subject><subject>Elasticity</subject><subject>Losses</subject><subject>Market distortions</subject><subject>Monopolies</subject><subject>Monopolistic competition</subject><subject>Numerical analysis</subject><subject>Studies</subject><subject>Trade gains</subject><subject>Utility functions</subject><subject>Variable markups</subject><issn>0165-1765</issn><issn>1873-7374</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2015</creationdate><recordtype>article</recordtype><recordid>eNqFkEtLw0AUhQdRsFZ_ghDoxk3ivZnMo6sixRcU3Cguh3Fyg4lpUmcSof_eKenKjavLhe8czjmMXSNkCChvm4xc37U0ZDmgyCDPAPgJm6FWPFVcFadsFjmRopLinF2E0ABgvlRixhbvn_vEekraPgQKSeX7bTJ4W1Iydm39Re1-dcnOKtsGujreOXt7uH9dP6Wbl8fn9d0mdYXGISVeiRjgg2OhXOmsdK5YCivjo1HrclkJ0ArIEYHQ0oITjoS1JTqhSkQ-ZzeT78733yOFwWzr4KhtbUf9GAxKHWtILlVEF3_Qph99F9NFSirgec4PlJgo52M7T5XZ-Xpr_d4gmMN0pjHH6cxhOgO5idNF3WrSUWz7U5M3wdXUOSprT24wZV__4_ALSnd4Ew</recordid><startdate>20150401</startdate><enddate>20150401</enddate><creator>Bykadorov, Igor</creator><creator>Gorn, Alexey</creator><creator>Kokovin, Sergey</creator><creator>Zhelobodko, Evgeny</creator><general>Elsevier B.V</general><general>Elsevier Science Ltd</general><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope><orcidid>https://orcid.org/0000-0002-2740-3905</orcidid></search><sort><creationdate>20150401</creationdate><title>Why are losses from trade unlikely?</title><author>Bykadorov, Igor ; Gorn, Alexey ; Kokovin, Sergey ; Zhelobodko, Evgeny</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c481t-e3f5201b3147cdca6cc495a67cd8188d9f50870ecee0586a0c5ce5aad1c57d113</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2015</creationdate><topic>Competition</topic><topic>Demand elasticity</topic><topic>Economic losses</topic><topic>Economic models</topic><topic>Economic theory</topic><topic>Elasticity</topic><topic>Losses</topic><topic>Market distortions</topic><topic>Monopolies</topic><topic>Monopolistic competition</topic><topic>Numerical analysis</topic><topic>Studies</topic><topic>Trade gains</topic><topic>Utility functions</topic><topic>Variable markups</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Bykadorov, Igor</creatorcontrib><creatorcontrib>Gorn, Alexey</creatorcontrib><creatorcontrib>Kokovin, Sergey</creatorcontrib><creatorcontrib>Zhelobodko, Evgeny</creatorcontrib><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Economics letters</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Bykadorov, Igor</au><au>Gorn, Alexey</au><au>Kokovin, Sergey</au><au>Zhelobodko, Evgeny</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Why are losses from trade unlikely?</atitle><jtitle>Economics letters</jtitle><date>2015-04-01</date><risdate>2015</risdate><volume>129</volume><spage>35</spage><epage>38</epage><pages>35-38</pages><issn>0165-1765</issn><eissn>1873-7374</eissn><abstract>Examining a standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion. Two numerical examples explain the losses (under unrealistic elasticities).
•The general New Trade model with variable costs/substitution is explored.•The necessary and sufficient condition for trade losses is found.•The condition means “misaligned” preferences under specific costs.•Numerical examples show that this case is possible but unlikely.</abstract><cop>Amsterdam</cop><pub>Elsevier B.V</pub><doi>10.1016/j.econlet.2015.02.003</doi><tpages>4</tpages><orcidid>https://orcid.org/0000-0002-2740-3905</orcidid><oa>free_for_read</oa></addata></record> |
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| ispartof | Economics letters, 2015-04, Vol.129, p.35-38 |
| issn | 0165-1765 1873-7374 |
| language | eng |
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| source | Elsevier ScienceDirect Journals |
| subjects | Competition Demand elasticity Economic losses Economic models Economic theory Elasticity Losses Market distortions Monopolies Monopolistic competition Numerical analysis Studies Trade gains Utility functions Variable markups |
| title | Why are losses from trade unlikely? |
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