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Introduction to Harberger’s Monopoly and Resource Allocation–The Pioneering Article on Deadweight Loss and Empirical Measurement of the Social Costs of Monopoly

By  |  December 20, 2015
Introduction to Harberger’s Monopoly and Resource Allocation–The Pioneering Article on Deadweight Loss and Empirical Measurement of the Social Costs of Monopoly

Hill Wellford, Nov 01, 2009

Arnold Harberger´s 1954 article, Monopoly and Resource Allocation,brought empirical analysis of the social costs of monopoly into the mainstream of antitrust work. In the mid-twentieth century, the dominant mode of monopoly analysis in the United States (and therefore worldwide) was structural rather than empirical, and that structural approach supported a highly interventionist antitrust regime. Harberger´s 1954 article broke with the then-current economic orthodoxy and set monopoly research on a path that would lead to a strong shift toward empiricism and the development of a more cautious approach for antitrust enforcement. The article is famous for bringing monopoly deadweight loss analysis into the mainstream.

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