Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Two counter-intuitive results regarding the number of firms emerge from the existing monopolistic competition literature. First, the number of firms is positively related to the extent of the monopoly power. Second, when the goods market is perfectly competitive, the number of firms is reduced to zero. This paper proposes a plausible way to escape from these two counter-intuitive deficiencies.