Gilles Saint-Paul
- Published in print:
- 2011
- Published Online:
- October 2017
- ISBN:
- 9780691128177
- eISBN:
- 9781400838899
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691128177.003.0012
- Subject:
- Economics and Finance, History of Economic Thought
This chapter explores how post-utilitarianism attempts to regulate individual actions and interactions with others affect the more impersonal and large-scale interactions that take place in markets. ...
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This chapter explores how post-utilitarianism attempts to regulate individual actions and interactions with others affect the more impersonal and large-scale interactions that take place in markets. Paternalistic governments can intervene in markets by imposing price restrictions on transactions. Such restrictions “work” because prices are a statistical signal that may be used by the government to infer the likelihood that a mistake has been made as well as the size of that mistake. By regulating prices, the government is thus screening transactions in such a way that those that go through are, on average, less plagued by mistakes. Such interventions again run counter to the liberal view that people should be responsible for their own choices, but they are welfare-improving from a utilitarian viewpoint.Less
This chapter explores how post-utilitarianism attempts to regulate individual actions and interactions with others affect the more impersonal and large-scale interactions that take place in markets. Paternalistic governments can intervene in markets by imposing price restrictions on transactions. Such restrictions “work” because prices are a statistical signal that may be used by the government to infer the likelihood that a mistake has been made as well as the size of that mistake. By regulating prices, the government is thus screening transactions in such a way that those that go through are, on average, less plagued by mistakes. Such interventions again run counter to the liberal view that people should be responsible for their own choices, but they are welfare-improving from a utilitarian viewpoint.
Joseph E. Stiglitz and Bruce C. Greenwald
- Published in print:
- 2014
- Published Online:
- November 2015
- ISBN:
- 9780231152143
- eISBN:
- 9780231525541
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231152143.003.0005
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter shows that the relationship between competition, innovation, and welfare in quite standard models of market interaction is far different than has been widely presumed. The first three ...
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This chapter shows that the relationship between competition, innovation, and welfare in quite standard models of market interaction is far different than has been widely presumed. The first three sections explain whether and the circumstances under which the level of innovation with monopoly is greater than that in more competitive environments, even apart from imperfections in risk and capital markets. The final section examines the flaws in Joseph Schumpeter's theory of market structure, i.e. that at any one moment of time the market would be dominated by a single firm but that there would be a succession of monopolists. It shows why the monopoly power that Schumpeter seems to extol may be more persistent than he thought and why Schumpeterian competition may not suffice to lead to a dynamic, learning economy, or at least leads to an economy which is not as dynamic as it could or should be.Less
This chapter shows that the relationship between competition, innovation, and welfare in quite standard models of market interaction is far different than has been widely presumed. The first three sections explain whether and the circumstances under which the level of innovation with monopoly is greater than that in more competitive environments, even apart from imperfections in risk and capital markets. The final section examines the flaws in Joseph Schumpeter's theory of market structure, i.e. that at any one moment of time the market would be dominated by a single firm but that there would be a succession of monopolists. It shows why the monopoly power that Schumpeter seems to extol may be more persistent than he thought and why Schumpeterian competition may not suffice to lead to a dynamic, learning economy, or at least leads to an economy which is not as dynamic as it could or should be.
