What is your opinion of monopolization?

[A18]

Not me, the concept. I say 5.

[John Dibble]

Really, it depends on the company and the market.

In certain markets, it's definitely a bad thing - especially in simple goods. There should be more than one orange producer and seller, for instance - such a good would simply be needlessly expensive in a monopoly setting. Most markets I prefer to be competitive.

In other markets, they can be unavoidable, like utilities on a local scale - it would be extremely difficult to get 10 electric companies.

A monopoly company can be good, provided they maintain the quality and service that allowed them to reach their level. Those that don't should expect competition.

[Gabu]

There are certain cases where it makes sense.  There's a category of goods in economics called "natural monopolies" - goods which are excludable (private companies can prevent consumers from having them), but non-rival (a consumer using this good does not prevent other consumers using this good).  In these cases, it makes perfect sense to have a monopoly: if there are more customers, the company can accomodate them with no problems whatsoever due to the good being non-rival, so unless the company is shafting its customers with exceedingly high prices, there's no real reason not to have a monopoly, as a competitor is not going to add much of anything to the market.

In cases where it's a private good instead of a natural monopoly (rival instead of non-rival), however, monopolies are almost always a bad thing.  There are two cases: either the monopoly does not price discriminate*, in which case total surplus** is lower than it would be in a competitive market, or the monopoly does price discriminate, in which case total surplus is equal to what it would be in a competitive market, but consumer surplus** is zero - the monopoly gets everything!

Regarding the actual poll question, I can't answer, as each situation is different.

* Price discrimination is where a monopolist charges different prices to different people.  Examples of price discrimination are different prices at a theatre, or student rates in bus fare.  Because different consumers value a product at different levels, price discrimination helps the monopolist maximize profit by attempting to charge each consumer exactly what that consumer values the product at.

** Total surplus is the sum of two terms: producer surplus and consumer surplus.  Producer surplus is how much more a producer sells a product than the price at which he would just barely be willing to sell.  For example, if a guy wants to sell his car for $1000, and sells it for $1500, his producer surplus is $500.  Consumer surplus is how much less a consumer buys a product than the price at which he would just barely be willing to buy.  For example, if a guy wants to buy a Playstation 2 for $150, and there's a sale at which he bought it for $100, his consumer surplus is $50.

[TomC]

I was thinking more like monopolization of the conversation. I give it a "1"

[Fmr. Gov. NickG]

Note that even in the case of natural monopolies, the same problems of inefficient supply and/or firm usurpation of surplus hold.  The only difference between a natural monopoly and a non-natural monopoly is that in the natural monopoly is monpolized because the cost structure of the market (usually efficiencies of supply) makes it inefficient for rivals to enter.  In the case of non-natural monopolies, rivals don't enter because of something external to the ideal free market structure: e.g. legal regulation, transaction costs, or short-term fluctuations. 

In either case, the monopolist can charge an inefficient price.  In non-natural monpolies, the price can be driven down naturally by rival entry.  In a natural monopoly, the market can only be rectified by nationalization, price regulation or an unrealistic degree of price discrimination, as rivals will  themselves produce inefficiently.

[Gabu]

Note that even in the case of natural monopolies, the same problems of inefficient supply and/or firm usurpation of surplus hold.  The only difference between a natural monopoly and a non-natural monopoly is that in the natural monopoly is monpolized because the cost structure of the market (usually efficiencies of supply) makes it inefficient for rivals to enter.  In the case of non-natural monopolies, rivals don't enter because of something external to the ideal free market structure: e.g. legal regulation, transaction costs, or short-term fluctuations. 

Yes, I'm not attempting to claim that monopolies in the case of natural monopolies are more efficient, only that they're a heck of a lot less avoidable, and thus, that it would be wrong to say that they're "bad" in this case.  It's still a monopoly even if you nationalize the industry.

[A18]

To the extent that there is a market opportunity, loans will be sufficient, so long as the competitor can provide something substantially better.

[Citizen James]

Monopolies suffer the same problem as communism - there's no compitition, so there are no market forces pushing for innovation, providing a better product for the consumer, or keeping prices down.

[A18]

No, that's not true at all. Monopolies exist by being the best, and satisfying customers so that there's not a new market opportunity. A new competitor can always emerge - that is not true with communism.

The mere threat of competition can yield substantive results.

[Gabu]

A new competitor can always emerge.

It's not always really that easy.  A lot of people are unhappy with Microsoft's products, for example, but because they're such a massive giant, and because they're in an industry where you can't just come in and start selling, it's very hard to get some serious competition that would actually threaten Microsoft if it didn't smarten up.

[A18]

Well, yes, if people find themselves attached to Microsoft because everything is based on it, then that's freedom for you. If they really don't like it so much, those people will have to switch.

[opebo]

Monopolies are fine, as long as they are public utilities.

[Alcon]

I have no problem with monopolization, assuming the company does not make competition possible. Google, for instance - if it has a monopoly on the search engine market - would have a deserved one. They continue to be a good model to me of how a company should work. They have made no attempt to hurt their competition beyond by improving themselves, and have been awarded greatly for it.

[Ebowed]

Google deserves a monopoly, because it's the best search engine out there (not to mention it has a kickass e-mail service).  Other corporations don't (for example, Microsoft is too big for its own good).  My opinion is pretty mixed.

[Fmr. Gov. NickG]

I don't have a problem with monopolies per se.  If one firm can provide a product to everyone more efficiently than anyone else, they should be a monopoly.  I actually think far more industries have natural monopoly-characteristics than what we commonly think of.

The problem is that monopolists have the market power to produce at an inefficient quantity and charge an inefficient price.  When there is a competitive free market, at least in theory, prices converge so that the point which maximizes profit also maximizes social wealth.  This is not true with monopolies.  So monopolies are fine, but they need to be price regulated (or nationalized) to assure that the efficient price and quantity are achieved.

[MaC]

something I can't understand.  A problem that started in the late 1800s when politicians gave large subsidies to their businessmen cronies.  The businessmen then had more capital to work with and began buying out their competitors.  Later on, in the early 1900s, politicians all of the sudden said "holy shi!t, they're taking total control of the market, we need to do some trustbusting".
 Moral of the story:
1.government can only see the short-term effects (getting re-elected
2.  Don't trust government to be fair and impartial.
3. Government creates more problems than it fixes.