Distributional comparative statics with heterogeneous agents

Arbeitspapier

We propose a formal way to systematically study the differential effects of exogenous shocks in economic models with heterogeneous agents. Our setting applies to models that can be rephrased as "competition for market shares" in a broad sense. We show that even in presence of any number of arbitrarily heterogeneous agents, a single recursion relation characterizes the distributional pattern of equilibrium market shares and related measures. We identify the general conditions under which the market share function rotates, thereby either causing more or less equality among the agents. Our setting highlights the exceptional rule that power functions play for the distributional effects. We apply our method across economic models, including examples from monopolistic competition, discrete choice, partial and general equilibrium theory and contest theory.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 237

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Asymmetric and Private Information; Mechanism Design ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games ; Existence and Stability Conditions of Equilibrium ; Miscellaneous Mathematical Tools
• Subject: Heterogeneity ; Inequality ; Monopolistic Competition ; General Equilibrium ; Contest Theory

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hefti, Andreas
• Event: Veröffentlichung
• (who): University of Zurich, Department of Economics
• (where): Zurich
• (when): 2016

Further information

• DOI: doi:10.5167/uzh-127897
• Handle: http://hdl.handle.net/10419/162440
• Last update: 10.03.2025, 11:44 AM CET