Economics, Econometrics and Finance
4 years ago

Monopoly Power Without Profits: How One Firm Can Dominate Markets.

RePEc: Research Papers in Economics
Perfectly Contestable Monopoly and Adverse Selection
Eric Bennett Rasmusen, Luis Moreno Fernández

Paper Summary

In some markets, a single company can serve everyone without making any profit, even when there are no barriers to competition. This can happen due to imperfect information, leading to a situation where the company has to subsidize some customers with others.

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