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What are the pros and cons of monopolies? Show more Show less
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The word monopolies has negative connotations in economic history, but recently monopolies have been praised by people such as Warren Buffett and Peter Thiel. The arguments for and against are not new, but now they have better empirical support.

Monopolies are damaging to economies Show more Show less

Monopolies choke economies: competition is central to a healthy economic system
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Oligopolies behave like monopolies

Concentrated oligopolies are just as bad for economic growth as monopolies
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The Argument

Oligopolies may give the appearance of competition, but generally industries with few players in repetitive games default towards cooperation. Cooperation entails limiting supply and raising prices. Research by the OECD shows that cartels and price fixing is widespread in oligopolies. Most cases involve industries with four major players. Many oligopolies don't even need to fix prices illegally and can "signal" their intentions to competitors. This is widely understood and covered in economic literature.

Counter arguments

Premises

Rejecting the premises

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    This page was last edited on Sunday, 4 Nov 2018 at 17:08 UTC

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