Monopoly innovation and welfare effects
AbstractIn 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. --
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Bibliographic InfoArticle provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.
Volume (Year): 4 (2010)
Issue (Month): 27 ()
Monopoly; technical innovation; welfare effects; general equilibrium;
Find related papers by JEL classification:
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
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- Hill, Martyn & Waterson, Michael, 1983. "Labor-managed Cournot oligopoly and industry output," Journal of Comparative Economics, Elsevier, vol. 7(1), pages 43-51, March.
- Delbono, Flavio & Denicolo, Vincenzo, 1991.
"Incentives to Innovate in a Cournot Oligopoly,"
The Quarterly Journal of Economics,
MIT Press, vol. 106(3), pages 951-61, August.
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