Monopoly,rent-seeking,and second best theory

In the context of a simple general equilibrium model, in which there is a profit-maximizing monopolist, we show that in general the introduction of rent-seeking does not restore the first best pricing rule for the undistorted industry. This result is in direct contrast to that obtained when one assumes that the monopolist follows a full cost pricing rule with a constant markup ratio. Furthermore, it still holds even if the full cost pricing rule is profit-maximizing. We also investigate the conditions under which the first best pricing rule is reinstated for the undistorted industry.     

垄断、竞争与政府政策

现实的市场是垄断与竞争的不同程度组合,垄断与竞争都是经济运行过程中所采用的手段与组织形式,而非经济运行的目的,经济运行的目的是经济发展、技术进步与消费者福利最大化。政府在垄断与竞争政策上,应以更好地实现经济运行的目标为原则,对不同的行业采用不同的垄断与竞争政策。     

Monopoly vs. competition in light of extraction norms

This note demonstrates that whether the market is competitive or monopolistic need not be the result of ideology, political power or non-convexity of the technology. The answer can be determined by a government that maximizes the extracted resources from the alternative market structures. Our claim is illustrated by assuming that demand and supply are linear functions and that the government can extract the same share of the producers?? profit under the alternative market structures. This share can be extracted from the actual producers or from the potential producers who take part in the contest to get a license to produce.