Laboratory markets are conducted to evaluate the effects of consumer search costs on market performance. The primary research goal is to assess the behavioral relevance of Diamond’s (1971) paradoxical conclusion that the injection of a small consumer search cost alters the equilibrium price prediction from competitive to monopoly levels. Although monopoly prices are not consistently observed, w...

His remonstrations were enjoined by Robert Merton, who reproached me for the false imputation that mistakes capitalism for industrialism. He was criticising an essay I had written in 1982 about the industrial sociology of his recently deceased student Alvin Gouldner. I claimed that Gouldner’s classic text, Patterns of Industrial Bureaucracy, missed the specifically capitalist character of indus...

Examination of the relation between scale economies and natural monopoly has been a central issue in public policy research. The paper employs Data Envelopment Analysis (DEA) methodology to re-examine the issue of natural monopoly for the Bell system with annual time series data for 1947–1977. Results from the DEA-based statistical tests reveal the prevalence of increasing returns to scale for ...

We analytically characterize the effects of ownership and competition in the health care industry on quality provision, market coverage and optimal co-payment policy. A private monopoly selects a lower quality than a public supplier, and the socially optimal co-payment rate with a private monopoly exceeds that with a public monopoly. We establish that the optimal co-payment policy is invariant ...

In this article, optimal two-part tariffs of a bi-directional telecommunications service are examined. Heterogeneous users are assumed to formulate social demand for the service. Two regimes of supplier are considered: monopoly and non-monopoly. In the latter, the supplier which enjoyed monopoly is faced with the entry of a competitive mpplier. Demand externalities which are conspicuous in tele...