Acton Institute Powerblog

The costs and benefits of monopoly

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Note: This is post #49 in a weekly video series on basic microeconomics.

What would happen if we eliminated patents for industries with high R&D costs, such as the pharmaceutical industry? Eliminating patents in this case may result in less innovation and, specifically, fewer new drugs being created, explains economist Alex Tabarrok. In this video by Marginal Revolution University he considers some of the tradeoffs of patents and looks at alternative ways to reward research and development such as patent buyouts and using prizes to foster innovation.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: The monopoly markup

Joe Carter Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).

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