Informational Structure and Effciency in Monopoly
The paper focuses on efficiency under monopoly. Contrary to common wisdom, nine examples given in the paper show that a Pareto-efficient output in monopoly is possible under both linear and nonlinear pricing. Pareto efficiency can be achieved when consumers are homogeneous as well as heterogeneous. Since Pareo-efficiency is possible under different demand and cost conditions; different pricing strategies; and different degree of consumer heterogeneity, in general, monopoly per se is not the cause for ineficiency.
|Date of creation:||03 Jul 2003|
|Date of revision:|
|Note:||Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP/PostScript/; pages: 25|
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References listed on IDEAS
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- Schmalensee, Richard., 1980.
"Output and welfare implications of monopolistic third-degree price discrimination,"
1095-80., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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- Schwartz, Marius, 1990. "Third-Degree Price Discrimination and Output: Generalizing a Welfare Result," American Economic Review, American Economic Association, vol. 80(5), pages 1259-62, December.
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