Monopoly Innovation and Welfare Effects
Nanyang Technological University (NTU) - Centre for Research in Financial Services (CREFS)
Lydia L. Gan
University of North Carolina at Pembroke; Medical Tourism Research Center
Economics: The Open-Access, Open-Assessment E-Journal, Vol. 4, 2010-27
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.
Number of Pages in PDF File: 23
Keywords: Monopoly, technical innovation, welfare effects, general equilibrium
JEL Classification: D50, D60Accepted Paper Series
Date posted: February 2, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo1 in 0.359 seconds