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2015, SMC University
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4 pages
1 file
Although monopoly problems occupy great portion of economic writing, there is not exact definition of it. In fact, the nature of monopoly is vague and confusing and very few economists have formulated a coherent, meaningful definition of monopoly (Rothbard & Murray, 1963). For example, it is stated “Monopoly exists when a firm has control over its price” (Rothbard & Murray, 1963, P.662). However, this definition is very misleading. As how could a firm controls the price when the price of the sale is voluntarily agreed upon by both parties of the exchange. For, the seller has the right to set any price for the good he sells, on the other hand, the consumer is free to set the price at which he will purchase the good (Rothbard & Murray, 1963).
PANORAMA ECONÓMICO
A production market with given preferences, technology and compe tition technology is vulnerable if it admits both perfect competition and monopoly or oligopoly. Under decreasing returns, sunk costs combined with a potential for monopoly profits provide a sufficient basis for vulnerability. A large agent can establish monopoly by installing enough productive capacity. The monopolist deters entry by threatening to oversupply the market. The threat is credible if the future discount rate is low enough and if enough small players enter the market in the absence of punishment. Financial institutions can capture vulnerable markets for profit, reducing competition, efficiency and equity.
2007
This paper addresses the concern that monopolies arise naturally out of the free market. An attempt is made to compare and contrast two theories of monopoly economic and political monopoly that this is not true. This paper further demonstrates that the two theories of monopoly have their separate roots in two opposite theories of competition: perfect competition and competition as rivalry. Hence the paper discusses only one of these theories of competition accurately describes the nature of competition in an economy. Besides, the paper also delves the two theories of competition and monopolies are derived from collectivist and individualist political philosophy. It illustrates how perfect competition and economic monopoly have undermined economists' understanding of the actual nature of both competition and monopoly. After investigating these theories, an attempt to made to apply them to show how one can come to very different conclusions about when monopoly power does and does ...
Essential Readings in Economics, 1995
European Economic Review, 1983
This paper studies the monopolistic and perfect competitive market structure+ whore the production process incorporates learning by doing. This analysis provides conditions undk which monopoly is preferred to perfect coq~5tioc from the consumers' point of view. 'B LB D. we refer to the phenomenon that unit production outpit [&, for example, Arrow (1962) and Spence (l!ibl)].
Monopoly pricing per se, that is without need of proof of anti-competitive conduct or intent, is regulated very differently on both sides of the Atlantic, at least in theory. U.S. antitrust law sets a straightforward rule: monopoly pricing, as such, is not regulated. In contrast, under EC law excessive pricing is considered an abuse of dominance and is punishable by fine and subject to a prohibitory order. These approaches fit the divide between the regulation of exclusionary and exploitative conduct: whereas exclusionary conduct is an offense against antitrust law on both sides of the Atlantic, exploitative conduct generally only breaches EU law. This article analyzes these regulatory approaches, their historical and theoretical roots, as well as the differences that exist in practice between the two systems. As will be shown, the divergent legal rules reflect different ideological goals and different assumptions about how markets operate. The U.S. views the unregulated economy as essentially competitive, if the creation of artificial barriers is prohibited. This approach places significant emphasis on the workings of the market and considers monopoly created by means other than artificial barriers to be relatively unimportant. It also reflects the limited role granted to government in regulating markets directly and the social, moral and political values attributed to the process of competition. EC law reflects a lesser belief in the ability of market forces to erode monopoly and a stronger belief in the ability of a regulator to intervene efficiently in setting the business parameters of firms operating in the market. It also reflects a stronger emphasis on distributional justice. The importance of the analysis lies beyond antitrust intervention in monopoly pricing, as it opens a window to much broader themes which underlie the competition policies of both jurisdictions and enables us to exemplify and contrast the foundations of both regulatory systems. The regulation of excessive pricing encapsulates issues such as the goals and underpinning of EC and U.S. antitrust systems; the equilibrium point which was adopted to balance between the forces of Darwinian capitalism and those of social justice; the role of government regulation; the balance between practical problems and theoretical principles; and the assumptions regarding the relative administrability of various types of regulation. Monopoly pricing regulation is thus, in many ways, a microcosm of competition policy.
Economics Letters, 1980
It is shown by example that, even if there are fixed costs, a monopolist may provide more than the socially optimal number of products.
Akdeniz İİBF Dergisi, 2007
Existence of monopoly and its costs to societies have been intensely studied. However, there has been no clear view obtained yet. Studies of rentseeking approach of the public choice school even make the issue more interesting. This paper surveys from traditional Harberger's triangle approach of social costs of monopoly to the most recent studies and drive some conclusions from it.
2013
A rm often desires to charge di¤erent prices for its product to distinct consumer groups based on their di¤erent demands or marginal costs of service. When only costs di¤er, monopoly di¤erential pricing generally raises both consumer and total welfare, compared to uniform pricing. Total welfare rises due to the output reallocation and quantity change e¤ects: The pass-through from marginal cost to monopoly price dictates that at least one of these two e¤ects must be positive (and dominate if the other is not), provided that demand satis es a minor curvature condition. Consumers gain in aggregate, because to reallocate output the rm must vary prices, creating price dispersion that entails no upward bias in average price. We also contrast these ndings with results under classic third-degree price discrimination, and provide su¢ cient conditions for bene cial di¤erential pricing when both demand and cost di¤er.
Griffith Law Review
ŻMT 2, Kraków: Wydawnictwo WAM 1996
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