Monopoly as a ‘culture-history fact’: Knight, Menger, and the role of institutions

Abstract Frank Knight's theory of monopoly price has received relatively little attention in the literature on Risk, Uncertainty and Profit . We argue that Knight accepted refined Carl Menger his followers. highlights difference between as an inevitable outcome departures from perfect competition, a contingent or ‘culture-history fact’. In latter case, coercive institutional barriers to potential competition shape choice set consumers producers, provide crucial method for identifying gains. There are three benefits this account contributions: it rehabilitates focus determinants price, opposed mainstream emphasis market frictions imperfections; opens way Mengerian seriously engages study institutions; adds new evidence nuance ongoing debates about place economics.