The ‘Welfare Loss from Monopoly’ Re-visited

Richard Carson ()
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Richard Carson: Department of Economics, Carleton University, https://carleton.ca/economics/people/carson-richard-l/

No 20-13, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: In the 1950s, economists claimed that the ‘welfare loss from monopoly’ was well below 1% of GNP. This led to the literature on rent seeking that argued for an additional loss equal to all or part of the economic profit. Here I identify a third loss in the form of suppression of innovation and entrepreneurship when this leads to a decrease in political support. This decrease results from an increase in political competition and loss of rent on old technology. The third loss may be the highest of all.

Keywords: Efficiency; Inclusiveness; Political Support; Rent Seeking. (search for similar items in EconPapers)
JEL-codes: D42 O30 P59 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2020-08
New Economics Papers: this item is included in nep-com, nep-ent and nep-hpe
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Published: Carleton Economics Papers

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