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.
Cite this paper
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.
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