Title: 
Headings: 

Content: First,
 
monopolies
 
generally
 
restrict
 
the
 
supply
 
of
 
their
 
product
 
in
 
order
 
to
 
keep
 
prices
 
and
 
profits
 
high. This
 
generally
 
results
 
in
 
under
 
provision
 
of
 
the
 
good
 
the
 
monopolist
 
produces,
 
relative
 
to
 
the
 
social
 
optimum. The
 
second
 
problem
 
is
 
what
 
economists
 
call
 
“rent
 
seeking”
 
behavior. When
 
entrepreneurs
 
know
 
that
 
there
 
is
 
an
 
opportunity
 
to
 
make
 
monopoly
 
profits,
 
they
 
compete
 
to
 
be
 
the
 
first
 
to
 
establish
 
a
 
monopoly
 
position. Since
 
only
 
one
 
firm
 
emerges
 
victorious,
 
the
 
resources
 
losing
 
firms
 
have
 
invested
 
in
 
the
 
race
 
to
 
monopoly
 
are
 
simply
 
wasted. Boldrin
 
and
 
Levine
 
identify
 
a
 
second
 
inefficiency
 
associated
 
with
 
rent
 
seeking
 
behavior,
 
when
 
an
 
established
 
monopoly
 
devotes
 
resources
 
to
 
maintaining
 
its
 
monopoly
 
position. This
 
kind
 
of
 
rent
 
seeking
 
behavior
 
manifests
 
itself
 
in
 
lobbying
 
of
 
legislatures
 
or
 
government
 
regulators
 
for
 
favorable
 
treatment
 
that
 
will
 
help
 
sustain
 
the
 
monopoly,
 
and
 
in
 
litigation
 
in
 
the
 
case
 
of
 
IP
 
monopolies
 
to
 
prevent
 
innovation
 
that
 
would
 
endanger
 
the
 
monopolist’s
 
hold
 
on
 
her
 
market. Boldrin