Welfare Improvement and the Extension of the Income Gap under Monopoly

DOI: 10.4236/tel.2015.54069   PDF   HTML   XML   3,159 Downloads   3,618 Views  

Abstract

This study constructs a model of a monopoly where investors are also actors, and shows that, in contrast to traditional models, this model admits the welfare improvement caused by monopoly. This study also reveals that if a huge income gap exists in the initial stage, then monopoly exacerbates the expansion of the income gap caused by market trades. Moreover, we show that this exacerbation occurs in general situations under some additional (but natural) assumptions.

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Hosoya, Y. and Kaneko, S. (2015) Welfare Improvement and the Extension of the Income Gap under Monopoly. Theoretical Economics Letters, 5, 590-597. doi: 10.4236/tel.2015.54069.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] Hicks, J.R. (1938) Value and Capital. Oxford University Press, Oxford.
[2] Mas-Colell, A., Whinston, M.D. and Green, J.R. (1995) Microeconomic Theory. Oxford University Press, Oxford.
[3] Okuno, M. (2008) Microeconomics. Tokyo University Press, Tokyo.
[4] Varian, H.R. (1992) Microeconomic Analysis. W. W. Norton and Company, New York.

  
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