The Welfare Effects of Monopoly Innovation

Shuntian Yao and Lydia L. Gan
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Shuntian Yao: Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore
Lydia L. Gan: Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore

No 609, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre

Abstract: 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 details. 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 dead weight loss is less accurate as previously postulated by many studies.

JEL-codes: D50 D60 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2006-09
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Persistent link: https://EconPapers.repec.org/RePEc:nan:wpaper:0609

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