We analyse product and process innovations in a monopoly model with vertical differentiation. The incentive towards both kinds of innovation is always larger under social planning than under monopoly. Therefore, the comparison between the two regimes’ welfare performance should account for the possibility that the planner and the monopolist adopt different technologies and supply different prod...

There is a general presumption that competition is a good thing. In this paper we show that competition in the insurance markets can be bad when there is adverse selection. Using the dual theory of choice under risk, we are able to fully characterize both the competitive and the monopoly market outcomes. When there are two types of risk, the monopoly dominates competition if and only if competi...

We show modern information technology (in short IT) is the cause of rising income and wealth inequality since the 1970's and has contributed to slow growth of wages and decline in the natural rate. We first study all US firms whose securities trade on public exchanges. Surplus wealth of a firm is the difference between wealth created (equity and debt) and its capital. We show (i) aggregate surp...

The modern literature on commodity bundling argues that a monopolist may use bundling to extend its monopoly power into an otherwise oligopolistic market by foreclosing entrants or excluding rivals. This approach is contrary to the Chicago critique of Posner and Bork, who defend bundling as irrelevant to such monopolization, being incapable of extending the “one monopoly rent.” However, this pa...

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Zhen Li1 and Qi Liao2 1Department of Economics and Management, Albion College, Albion, Michigan, USA 2Department of Computer Science, Central Michigan University, Mount Pleasant, Michigan, USA ABSTRACT Economics play an increasingly important role in fighting cyber crimes. While the arms race against botnet problems has achieved limited success, we propose an approach attacking botnets through ...

Dear Editor: Thirty-one countries in the world have no medical schools [1]. This is an imperfect state of affairs. However it is one that is unlikely to last much longer as universities within these countries and medical schools elsewhere move to close the gap. Another perhaps surprising fact is that 44 countries have just one medical school [1]. These schools have a monopoly in each individual...

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 with non-price-taking behavior 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 cr...