Monopoly and competition in addictive markets

Files in This Item:
File Description SizeFormat 
wp84_20.pdf488.18 kBAdobe PDFDownload
Title: Monopoly and competition in addictive markets
Authors: Murray, Sean
Permanent link:
Date: Mar-1984
Online since: 2009-09-03T14:12:58Z
Abstract: This paper models monopoly markets on which demand is addictive as defined by Stigler and Becker; and hence dynamic. It is shown that the monopolists' equilibrium is unique and stable and the time path taken to reach it is also unique. The comparative statics and comparative dynamics of these markets are analysed. It is proved formally that the harmfully (beneficially) addictive monopolist will produce to the left (right) of the equality between marginal revenue and marginal cost, and that the latter may produce where marginal revenue is negative. The model is applied to policy problems in drug-related crime in both long and short runs under monopoly than under competition. The reverse holds true under demand-directed policies. Demand-directed polices cause less crime than supply-directed policies whether competition or monopoly obtains.
Item notes: A hard copy is available in UCD Library at GEN 330.08 IR/UNI
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; No. 20
Subject LCSH: Monopolistic competition--Mathematical models
Demand (Economic theory)
Substance abuse--Econometric models
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

Show full item record

Page view(s) 50

Last Week
Last month
checked on Apr 1, 2020


checked on Apr 1, 2020

Google ScholarTM


This item is available under the Attribution-NonCommercial-NoDerivs 3.0 Ireland. No item may be reproduced for commercial purposes. For other possible restrictions on use please refer to the publisher's URL where this is made available, or to notes contained in the item itself. Other terms may apply.