A neglected welfare cost of monopoly - and most other product market distortions

• 成果类型: Article
• 署名作者: Browning, EK
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(96)01613-1
• 发表日期: 1997
• 页码: 127-144
• 关键词: Monopoly; taxation; welfare costs

摘要

A neglected effect of monopoly is the distortion in the quantity of resources supplied. Monopoly not only affects the economy's output mix, it also results in factor prices that are below social marginal value products. This latter distortion is shown to be quantitatively important when other policies, such as taxes on labor earnings, also depress factor prices. Under plausible conditions, the welfare cost due to this distortion of monopoly is shown to be between five and fifteen times larger than the more familiar ''Harberger triangle'' output mix distortion of monopoly. It is suggested that the resource supply effects of many other policies are similarly likely to be more important than their commonly evaluated output market effects. (C) 1997 Elsevier Science S.A.