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Innovation enables monopolists to lower their costs, expand their outputs, and reduce their prices. It is conventional to conclude that social welfare unambiguously increases as a result. Assuming linear demand and marginal cost, this paper shows, however, that innovation raises the opportunity...

We show that monopoly is the parent of monopsony when an industry employs specialized resources. This means that the welfare loss from monopoly and monopolization is larger than commonly portrayed. Copyright (C) 2010 John Wiley & Sons, Ltd.

We develop a simple insurance model of the secondary market for tickets to account for some of the observed spatial patterns of prices. Beyond ticket markets the model draws attention to the existence of subtle insurance fees in market prices that may be incorrectly attributed to breakdown of...