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Monopolistic Competition and Entrepreneurial Risk Taking - Too many Cooks Spoil the Broth (but Everyone is better off)
The paper investigates the effects of monopolistic competition on entrepreneurial risk taking in a general equilibrium model. Comparative static results show that too many firms remain in the market for an increase in the degree of risk aversion, thereby mutually deteriorating profit opportunities.
Link
http://www.wiwi.uni-hannover.de/fbwiwi/forschung/diskussionspapiere/dp-303.pdf