Competition Policy

Abstract

Governments need a competition policy only if they believe that the existence of monopoly creates costs to society. If these costs are negligible, then there is little need for policies aimed at reducing monopoly abuses, particularly since devising and implementing such a policy has costs which may exceed any benefits. It is therefore necessary to begin by analysing the costs of monopoly. It will come as no surprise to learn that there is considerable disagreement among economists about the extent of monopoly costs, and also about the policies which are most appropriate to reduce these costs.