Monopoly and Resource Allocation

Arnold Harberger, Arnold Harberger, Nov 01, 2009

This classic 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, graphically represented as the “deadweight loss triangle” familiar to all modern students of antitrust; so much so, in fact, that deadweight loss triangles are now known as “Harberger triangles.” But it was Harberger’s final estimate of the social costs of monopoly that was the bombshell in this work.

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