Against intellectual monopoly Michele Boldrin and David K. Levine (2010). Below is a selection of passages I found enlightening. Chapter 4. The Evil of Intellectual Monopoly ... The example of AIDS drugs brings out another feature of monopoly – their desire to price discriminate. That is, competitors charge the same price to everyone, while monopolies try to extract a higher price from those who value the product more highly. Economists usually argue that this is a good thing because monopoly without price discrimination is even worse than monopoly with price discrimination. Price discrimination, they argue, enables lower valued consumers to purchase a product that otherwise the monopoly would not sell to them. Relatively speaking – that is: relative to a word where the monopolist does not price discriminate – this is a correct statement. In the case of AIDS drugs, effective price discrimination would enable the large pharmaceutical companies to charge a low price to poor blacks without lowering the price they charge rich whites. A more successful example of price discrimination for drugs is the low price charged poor Canadians against the high price charged rich Americans.
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Against Intellectual Monopoly
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Against intellectual monopoly Michele Boldrin and David K. Levine (2010). Below is a selection of passages I found enlightening. Chapter 4. The Evil of Intellectual Monopoly ... The example of AIDS drugs brings out another feature of monopoly – their desire to price discriminate. That is, competitors charge the same price to everyone, while monopolies try to extract a higher price from those who value the product more highly. Economists usually argue that this is a good thing because monopoly without price discrimination is even worse than monopoly with price discrimination. Price discrimination, they argue, enables lower valued consumers to purchase a product that otherwise the monopoly would not sell to them. Relatively speaking – that is: relative to a word where the monopolist does not price discriminate – this is a correct statement. In the case of AIDS drugs, effective price discrimination would enable the large pharmaceutical companies to charge a low price to poor blacks without lowering the price they charge rich whites. A more successful example of price discrimination for drugs is the low price charged poor Canadians against the high price charged rich Americans.