Journal Article

No. 2010-27 | October 04, 2010
Monopoly Innovation and Welfare Effects PDF Icon

Abstract

In this paper we study the welfare effect of a monopoly innovation. Unlike many partial equilibrium models carried out in previous studies, general equilibrium models are constructed and analyzed in greater detail. We discover that technical innovation carried out by a monopolist could significantly increase the social welfare. We conclude that, in general, the criticism against monopoly innovation based on its increased deadweight loss is less accurate than previously postulated by many studies.

JEL Classification

D50 D60

Citation

Shuntian Yao and Lydia Gan (2010). Monopoly Innovation and Welfare Effects. Economics: The Open-Access, Open-Assessment E-Journal, 4 (2010-27): 1—21. http://dx.doi.org/10.5018/economics-ejournal.ja.2010-27

Assessment

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Comments and Questions


Jiddah M.A. Ajayi - monopoly is after all has it's better side
October 07, 2010 - 11:51

from the article it can be analogically deducted that monopoly is not after-all a bad concept/principle,in view of it's benefits to social welfare,which should after all be the conerstone of any rational policy that is(or should be)based on people's progress