Innovation Competition And Welfare Enhancing Monopoly
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| Author | : Michael R. Darby |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 2006 |
| Genre | : Technological innovations |
| ISBN | : |
Abstract: So long as the entry and exit of firms using the generic technology sets the price in an industry, one or more price-taking firms can coexist with proprietary technologies yielding more or less substantial quasi-rents to the sunk development costs. Consumer welfare is increased if an innovator creates a proprietary technology such that the market equilibrium price is reduced and output increased. If the technological breakthrough is sufficiently large for the innovator to drive all generic producers out of the industry and increase output as a wealth-maximizing monopolist, consumer welfare is surely increased. After some time, the innovative technology will diffuse into an imitative generic technology. The best innovators develop a stream of innovations so that technological leaders can maintain their status as dominant firm or monopolist for extended periods of time despite lagged diffusion, and consumers benefit from this stream as well. The economics of an innovative nation are different from those of the no-growth stationary state which we teach and fall back on. We propose an ambitious agenda to integrate major research streams treating innovation as an object of economic analysis into our standard models.
| Author | : Michael R. Darby |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2011 |
| Genre | : |
| ISBN | : |
The basic competitive model with freely available technology is suited for static industries but misleading as applied to major innovative economies for which development of new technologies equals in magnitude around 10% of gross domestic investment. We distinguish free generic technology from proprietary technologies resulting from risky investment with uncertain outcome. The totality of possible outcomes drives the national innovation system and the returns to a particular successful technology cannot be compared to its own direct investment costs. Eureka moments are hardly ever self-enabling and incentives are required to motivate investment attempting to turn them into an innovation. The alternative to a valuable proprietary innovation is not the same innovation freely available but the unchanged generic technology. Growth is concentrated in any country at any time in a few firms in a few industries that are achieving metamorphic technological progress as a result of breakthrough innovations. So long as the entry and exit of firms using the generic technology sets the price in an industry, one or more price-taking firms can coexist with proprietary technologies yielding more or less substantial quasi-rents to the sunk development costs. Consumer welfare is increased if an innovator creates a proprietary technology such that the market equilibrium price is reduced and output increased. If the technological breakthrough is sufficiently large for the innovator to drive all generic producers out of the industry and increase output as a wealth-maximizing monopolist, consumer welfare is surely increased. After some time, the innovative technology will diffuse into an imitative generic technology. The best innovators develop a stream of innovations so that technological leaders can maintain their status as dominant firm or monopolist for extended periods of time despite lagged diffusion, and consumers benefit from this stream as well. The economics of an innovative nation are different from those of the no-growth stationary state which we teach and fall back on. We propose an ambitious agenda to integrate major research streams treating innovation as an object of economic analysis into our standard models.
| Author | : Richard B. McKenzie |
| Publisher | : University of Michigan Press |
| Total Pages | : 629 |
| Release | : 2019-02-28 |
| Genre | : Business & Economics |
| ISBN | : 0472126288 |
In Defense of Monopoly offers an unconventional but empirically grounded argument in favor of market monopolies. Authors McKenzie and Lee claim that conventional, static models exaggerate the harm done by real-world monopolies, and they show why some degree of monopoly presence is necessary to maximize the improvement of human welfare over time. Inspired by Joseph Schumpeter's suggestion that market imperfections can drive an economy's long-term progress, In Defense of Monopoly defies conventional assumptions to show readers why an economic system's failure to efficiently allocate its resources is actually a necessary precondition for maximizing the system's long-term performance: the perfectly fluid, competitive economy idealized by most economists is decidedly inferior to one characterized by market entry and exit restrictions or costs. An economy is not a board game in which players compete for a limited number of properties, nor is it much like the kind of blackboard games that economists use to develop their monopoly models. As McKenzie and Lee demonstrate, the creation of goods and services in the real world requires not only competition but the prospect of gains beyond a normal competitive rate of return.
| Author | : Jerome Ellig |
| Publisher | : Cambridge University Press |
| Total Pages | : 298 |
| Release | : 2001-04-23 |
| Genre | : Business & Economics |
| ISBN | : 9780521782500 |
Scholars explore antitrust issues as these relate to dynamic industry competition and public policy.
| Author | : Richard A. Posner |
| Publisher | : Cato Institute |
| Total Pages | : 131 |
| Release | : 1999-04-01 |
| Genre | : Political Science |
| ISBN | : 1933995823 |
Natural monopolies exist in those markets in which demand can be satisfied at lowest cost by the output of only one rather than several competing firms. Under such conditions, conventional wisdom suggests that government regulation must substitute for competition to discipline the behavior of firms. Thirty years ago a young professor named Richard Posner asked the provocative question of whether the existence of natural monopoly provides adequate justification for government intervention. His even more provocative answer was no. The evils of natural monopoly are exaggerated, the effectiveness of regulation in controlling them is highly questionable, and regulation costs a great deal. "The resources and energies of government should be directed to problems we know are substantial, that we think are traceable to government action, and that cannot be left to the private sector to work out. There are plenty of those problems, and it is doubtful that natural monopoly is among them." Thirty years after its initial publication, read the original insights of Richard Posner about the regulation of natural monopoly as well as a new preface in which Posner reflects on the deregulation of industries that has occurred since 1969 and the possibilities for more deregulation in the future."
| Author | : Andreas Klein |
| Publisher | : GRIN Verlag |
| Total Pages | : 16 |
| Release | : 2007-02-26 |
| Genre | : Business & Economics |
| ISBN | : 3638619834 |
Essay from the year 2006 in the subject Business economics - Offline Marketing and Online Marketing, grade: A, University of Bradford, course: MBA, language: English, abstract: Two questions are covered by this paper: 2 a) Compare and contrast the models of perfect competition and monopoly. (50%) 2 b) “Monopoly profits are essential for higher innovation rates and future economic growth.” Evaluate this statement. (50%)
| Author | : Fouad Sabry |
| Publisher | : One Billion Knowledgeable |
| Total Pages | : 345 |
| Release | : 2024-01-20 |
| Genre | : Business & Economics |
| ISBN | : |
What is Government Granted Monopoly In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law, regulation, or other mechanisms of government enforcement. As a form of coercive monopoly, government-granted monopoly is contrasted with an unregulated monopoly, wherein there is no competition but it is not forcibly excluded. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: Government-granted monopoly Chapter 2: Intellectual property Chapter 3: Monopoly Chapter 4: Monopolistic competition Chapter 5: Natural monopoly Chapter 6: Imperfect competition Chapter 7: Deadweight loss Chapter 8: United States antitrust law Chapter 9: Rent-seeking Chapter 10: Anti-competitive practices Chapter 11: Barriers to entry Chapter 12: Coercive monopoly Chapter 13: Monopoly profit Chapter 14: Competition law Chapter 15: State monopoly Chapter 16: Industrial property Chapter 17: Parallel import Chapter 18: Economics and patents Chapter 19: Arnold Harberger Chapter 20: Profit (economics) Chapter 21: Criticism of patents (II) Answering the public top questions about government granted monopoly. (III) Real world examples for the usage of government granted monopoly in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of Government Granted Monopoly.
| Author | : National Bureau of Economic Research |
| Publisher | : Princeton University Press |
| Total Pages | : 647 |
| Release | : 2015-12-08 |
| Genre | : Political Science |
| ISBN | : 1400879760 |
The papers here range from description and analysis of how our political economy allocates its inventive effort, to studies of the decision making process in specific industrial laboratories. Originally published in 1962. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.
| Author | : Richard J. Gilbert |
| Publisher | : MIT Press |
| Total Pages | : 337 |
| Release | : 2022-06-07 |
| Genre | : Business & Economics |
| ISBN | : 0262545799 |
A proposal for moving from price-centric to innovation-centric competition policy, reviewing theory and evidence on economic incentives for innovation. Competition policy and antitrust enforcement have traditionally focused on prices rather than innovation. Economic theory shows the ways that price competition benefits consumers, and courts, antitrust agencies, and economists have developed tools for the quantitative evaluation of price impacts. Antitrust law does not preclude interventions to encourage innovation, but over time the interpretation of the laws has raised obstacles to enforcement policies for innovation. In this book, economist Richard Gilbert proposes a shift from price-centric to innovation-centric competition policy. Antitrust enforcement should be concerned with protecting incentives for innovation and preserving opportunities for dynamic, rather than static, competition. In a high-technology economy, Gilbert argues, innovation matters. Gilbert considers both theory and available empirical evidence on the relationships among market structure, firm behavior, and the production of new products and services. He reviews the distinctive features of the high-tech economy and why current analytical tools used by antitrust enforcers aren't up to the task of assessing innovation concerns. He considers, from the perspective of innovation competition, Kenneth Arrow's “replacement effect” and the Schumpeterian theory of market power and appropriation; discusses the effect of mergers on innovation and future price competition; and reviews the empirical literature on competition, mergers, and innovation. He describes examples of merger enforcement by US and European antitrust agencies; examines cases brought against Microsoft and Google; and discusses the risks and benefits of interoperability standards. Finally, he offers recommendations for competition policy. The open access edition of this book was made possible by generous funding from Arcadia – a charitable fund of Lisbet Rausing and Peter Baldwin.
| Author | : Suzanne Scotchmer |
| Publisher | : MIT Press |
| Total Pages | : 382 |
| Release | : 2004 |
| Genre | : Business & Economics |
| ISBN | : 9780262195157 |
The economics of intellectual property and R&D incentives explained in a balanced, accessible mixture of institutional details and theory.
