Monopoly businesses. Net loss of utility through inefficiency.
However, increasing returns to scale may make a monopoly a more efficient producer than a non-monopoly. In those cases the efficiency loss due to the lack of competition may be more than cancelled out by the efficiency gain from exploiting returns to scale.
The “canceled out” part depends on whether your interested in the utility of stockholders and the reduced resource consumption of the manufacturing process or the utility of the general population which might have to consume less of the product than they’d otherwise be able (because of higher prices) or more generally have less capital left to buy other things they need/want. Monopolies with regulated price structures sometimes work, I guess, though it’s complicated.
Sorry I guess it wasn’t clear. I was contrasting two naive utility functions: a flat one which adds up the utilons of all people versus one that only counts the utilons of stock brokers. I’m not asserting that one or the other is “right”. Both utilities would have some additional term giving utility for preserving resources, but I’m not being concrete about how that’s factored in. [I’m also not addressing in any depth the complications that a full utilitarian calculation would need like estimated discounted future utilons, etc.] Did I clear it up or make it worse?
I took “or” in your previous comment to be exclusive, so that “the general population” does not include stockholders. Are you now saying that your two categories are “stock holders” and “everyone, including stock holders”? (And presumably meant “stock holders” when you wrote “stock brokers” in you most recent comment”)
However, increasing returns to scale may make a monopoly a more efficient producer than a non-monopoly. In those cases the efficiency loss due to the lack of competition may be more than cancelled out by the efficiency gain from exploiting returns to scale.
The “canceled out” part depends on whether your interested in the utility of stockholders and the reduced resource consumption of the manufacturing process or the utility of the general population which might have to consume less of the product than they’d otherwise be able (because of higher prices) or more generally have less capital left to buy other things they need/want. Monopolies with regulated price structures sometimes work, I guess, though it’s complicated.
So… what utility will be calculated will depend on whether one arbitrarily excludes a set of humans from the utility calculation?
Sorry I guess it wasn’t clear. I was contrasting two naive utility functions: a flat one which adds up the utilons of all people versus one that only counts the utilons of stock brokers. I’m not asserting that one or the other is “right”. Both utilities would have some additional term giving utility for preserving resources, but I’m not being concrete about how that’s factored in. [I’m also not addressing in any depth the complications that a full utilitarian calculation would need like estimated discounted future utilons, etc.] Did I clear it up or make it worse?
I took “or” in your previous comment to be exclusive, so that “the general population” does not include stockholders. Are you now saying that your two categories are “stock holders” and “everyone, including stock holders”? (And presumably meant “stock holders” when you wrote “stock brokers” in you most recent comment”)
yes, that’s what I meant; thank you.