Talk:Monopoly

The example of AT&T sounds like an argument in favor of the break-up: service would not suffer, so we should break it up. I personally had a live radio debate with a rep from AT&T who argued that the break-up would hurt consumers.

Let's make the article NPOV. Describe what a monopoly is. After that, give arguments for and against granting monopolies.

Perhaps there are some circumstances in which monopolies are "good" -- such as municipal water utilities. Some disputed examples would be electric power generation/distribution or cable TV.

The article should shed some light on the Microsoft operating system monopoly (quasi-monopoly? near monopoly) in the PC market -- without getting into all the ins and outs of the court cases -- just the economic issues.

Who can write this?

Contents

1 Murray Rothbard 2 Salt monopoly 3 SALT MONOPOLY 4 de facto 5 Monopolistic competition

Murray Rothbard

The economic incentives for a monoply make it likely that they will sell a lower quantity of goods at a higher price than firms would in a purely competitive market in order to secure monopoly profits Removed:

though Murray Rothbard has shown (Man, Economy, and State, chapter 10) that this is only possible in the case of a government-granted monopoly.

That doesn't make sense to me. What about natural monopolies like the telephone company or railroads. I would expect that they would be able to sustainably charge above competative rates because of the high cost to enter the industry. Please exaplain more if you wish to add this to the article. Thanks. Jrincayc 02:04, 29 Apr 2004 (UTC)

To claim point blank that Rothbard has shown this is certainly POV, but it is perhaps worth mentioning Rothbard's take (and the Austrian School's take more broadly) on the nature of competition and monopoly. The argument goes something like this: government-granted monopolies are able to act somewhat as the classical analysis suggests that they would, because the law forcibly prohibits any competitors from entering the market (and the monopolists themselves don't have to foot the bill for squashing any attempts at trading through the black market). But "natural monopolies," they argue, face "virtual competition" even if they do not face actual competition: specifically, they have to set their quantity and price (and engage in entrepreneurial activities) with the expectation that the closer they charge to classical monopoly prices rather than equilibrium prices, and the less they invest in entrepreneurship and research, the more of an incentive and an opportunity they create for entrepreneurs to enter the market to compete with them. (They'd also point out, quite rightly, that heavily subsidized and regulated industries such as the railroad and telephone infrastructures are not the best case studies in the action of "natural" monopolists....) Radgeek 19:49, 17 Jul 2004 (UTC)

Salt monopoly

SALT MONOPOLY

Every monopoly must be considered to be potentially "bad " It may temporarily be "good" so long as there is an alternative - but then it wouldnt be a monopoly

By definition a monopoly allows exclusive sale or purchase of a product or service, however the control and exclusivity of a human need in the hands of another human is at its most dangerous when its basic availability is at stake - sooner or later the exclusivity is mishandled either intentionally or not. Slavery was clearly the ultimate result of monopoly.

Such was the monopoly of the supply of salt - a human need equivilent to the air we breath, the water we drink and the proteins we consume. SALT MADE THE WORLD GO ROUND David Bloch (http://www.salt.org.il)

de facto

It says in the article: "A monopoly can also arise from "fair" competition, when a single provider of a good or a service is chosen extensively or exclusively by the marketplace. Such monopolies are termed de facto monopolies." This conflicts with the comments earlier in the article equating a de facto monopoly with a natural monopoly. What is the truth? (RJII) DEC 29

My impression is that a "natural monopoly" is a kind of "de facto monopoly." That is, not all de facto monopolies are natural monopolies (given the definition of natural monopoly in the article). (RJII) DEC 29

This idea probably arises from an intuitive opposition of "de jure" and "de facto"; but the meaning does not permit this. "De jure" is just a synonym for legal (i.e. government) monopoly. But a "de facto" monopoly simply means a near-monopoly or "effective" monopoly - try Googling the term. It isn't actually a classification in the same way as "legal" and "natural"; it's more a qualifier. If you want to put a name to it, maybe monopolistic competition. Rd232 17:23, 30 Dec 2004 (UTC)

Oh, I see where you're coming from - you want to use "de facto" as the name you were searching for in the Talk:Natural monopoly discussion. Sorry, it won't work. Look up de facto. Rd232 17:28, 30 Dec 2004 (UTC)

You're correct that these concepts are not at all the same, and I've edited the article to separate them. I had a lot of trouble concentrating due to off-line distractions, so someone should probably copyedit what I wrote to be more readable. Gazpacho 06:24, 30 Dec 2004 (UTC)

Look like Rd232 disagrees with you and removed your changes and my editing. (RJII) DEC 30

Monopolistic competition

The definition of monopolistic competition that appears in Wikipedia is incorrect. The article claims that:

"Industries which are dominated by a single firm may allow the firm to act as a near-monopoly or "de facto monopoly", a practice known in economics as monopolistic competition."

In fact, monopolistic competition is something else altogether. It was developed almost simultaneously by American economist Edward Chamberlin (1899-1967) and English economist Joan Robinson (1903-1983). It is a hybrid of competition and monopoly which describes well the chaacteristics of some markets such as detergents, shampoo, cereals and other markets with differentiated products. One possible definition is:

"A type of competition within an industry where:

1. All firms produce similar yet not perfectly substitutable products.

2. All firms are able to enter the industry if the profits are attractive.

3. All firms are profit maximizers.

4. All firms have some market power, which means none are price takers." (www.answers.com)

The point about monopolistic competition is that there are many (potentially infinite)differentiated submarkets in which a particular firm is a monopoly (thus it sets price and quantity), but because of free entry and competition across submarkets, none of the firms make profits. It is a blend of competition and monopoly.

This is quite different from the definition given by Wikipedia and should be corrected ASP.