The Social Costs of Monopoly Power

Cowling, Keith; Mueller, Dennis C.

doi:10.2307/2231975

Cited by 206 publications

(75 citation statements)

References 14 publications

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“…At one extreme, Harberger (1954) estimated the welfare cost of monopoly power to be 0.1 percent of GNP for the U.S. economy. At the other extreme, Cowling and Mueller (1978) found a welfare cost of the order of 10 percent of GNP. These early studies were conducted in a partial equilibrium framework and may therefore not have captured all aspects of the welfare consequences.…”

Section: Introductionmentioning

confidence: 99%

The welfare cost of imperfect competition and distortionary taxation

Jönsson

2007

Review of Economic Dynamics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Working Paper series presents reports on matters in the sphere of activities of the Riksbank that are considered to be of interest to a wider public. The papers are to be regarded as reports on ongoing studies and the authors will be pleased to receive comments. Terms of use: Documents inThe views expressed in Working Papers are solely the responsibility of the authors and should not to be interpreted as reflecting the views of the Executive Board of Sveriges Riksbank. AbstractThe welfare cost of imperfect competition in the product and labor market as well as distortionary taxation is quantified in a dynamic general equilibrium model parameterized to fit the U.S. economy. We find that the welfare cost of imperfect competition in the product market is 35.74 percent while it is 0.66 percent in the labor market, taking the transition from the distorted to the optimal steady state into account. If we also take into account that the U.S. economy is characterized by distortionary taxation the welfare cost in the product market increases to 48.26 percent and 4.70 percent in the labor market.

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Section: Introductionmentioning

confidence: 99%

The welfare cost of imperfect competition and distortionary taxation

Jönsson

2007

Review of Economic Dynamics

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“…Several efforts to estimate the extent of losses from rent seeking also were undertaken using estimation strategies based on Krueger (1974). For example, Cowling and Mueller (1978) estimated losses from resources invested in rent seeking by monopolists in the United Kingdom and the United States. Laband and Sophocleus (1992) estimated losses from all conflicts over real resources in the United States.…”

Section: Interest Groups and Public Policymentioning

confidence: 99%

Intellectual foundations of public choice, the forest from the trees

Congleton

2018

Public Choice

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After War World II, a group of scholars began using rational choice models from economics and game theory to examine the manner in which public policies would be determined if men and women were as "rational" in their political activities as they were in other spheres of life. The implications of such an approach to politics were not obvious and took decades to be worked out. Indeed, they are still being worked out. The result was a new field of research that deepened our understanding of economic and political systems and their many interdependencies. This review essay provides an overview of the core findings of public choice during its first half century and of the boot-strapping process through which those findings emerged. Those core findings provide the idea base and results that ground most contemporary public choice research. Keywords

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“…In addition, Cowling and Mueller (1978) obtained empirical estimates of the social cost of monopoly power for both the United States and United Kingdom. Using a partial equilibrium framework, they proved that costs of monopoly power on an individual firm basis were generally large.…”

Section: Literature Reviewmentioning

confidence: 99%

Monopoly Innovation and Welfare Effects

Yao

Gan

2010

Economics

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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. JEL D50, D60

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The Social Costs of Monopoly Power

Cited by 206 publications

References 14 publications

The welfare cost of imperfect competition and distortionary taxation

The welfare cost of imperfect competition and distortionary taxation

Intellectual foundations of public choice, the forest from the trees

Monopoly Innovation and Welfare Effects

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