privatization in eastern germany management selection and economic transition this paper suggests that management s role in enterprise restructuring and market failures in the managerial labor market help explain important features of the german privatization program a model of adverse selection based on information advantages for private owners demonstrates how privatization can improve the quality and number of western managers in eastern enterprises these benefits can increase with the size of the transition evidence of management replacement and significant differences between state owned and privatized firms from a survey of eastern german firms supports model assumptions and predictions these results suggest the importance of management replacement to successful privatization copyright 1997 by american economic association

consumer support for environmental policies an application to purchases of green cars this paper focuses on how consumer motivation can be tapped in order to encourage the adoption of cleaner technologies consumers are heterogeneous they may be guided by intrinsic motivation or extrinsic motivation while information provision policies such as the energy label for cars may be effective in encouraging certain consumers to adopt green cars financial incentive schemes such as subsidies or fines may be more persuasive for extrinsically motivated consumers we develop a dynamic theory of adoption of environmental innovations in which information provision policies are followed by financial incentives first carrot then stick incentives analysis of a survey dataset of swiss households observes considerable heterogeneity in terms of support of information provision or financial incentive policies in line with our conjectures our results will be of particular interest to policymakers interested in guiding consumers towards cleaner technologies

alternative models of individual behaviour and implications for environmental policy abstract most insights of environmental economics are in line with the standard neoclassical economic model of rational behaviour formulated in terms of maximization of utility in general or of profits in particular the standard theory of environmental policy is a case in point however the maximization hypothesis and its methodological foundation have been criticized on many grounds related to a lack of either logical or empirical content moreover over the years a great many alternative models of behaviour have been proposed both criticism and alternatives are surveyed here attention is devoted to relevant insights from the philosophy of science the notion of methodological individualism and other criticism the alternative behavioural models include bounded rationality and satisficing lexicographic preferences habitual behaviour incommensurability and multicriteria evaluation and various models of behaviour under uncertainty major implications of the criticism and alternative models of individual behaviour for environmental policy theory are outlined

second order sustainability conditions for the development of sustainable innovations in a dynamic environment abstract in particular radical innovations can be important means to achieving improved sustainability due to the existence of path dependency and lock in however the transition from one technological trajectory to another more sustainable one is often impeded by significant barriers fortunately these barriers are by their nature subject to substantial changes in time so it makes sense to carefully distinguish between periods of stability showing high barriers in which the given trajectory can hardly be left and periods of instability characterized by low barriers where a new trajectory can be reached more easily the latter distinction matters since sustainable innovations often rely on governmental regulation and the economic burden arising from this regulation will be much lower in periods of instability moreover due to the complexity and dynamics of change in their respective environments innovations are generally associated with fundamental uncertainty such that it becomes impossible to predict the degree of sustainability yielded by specific innovations in the longer run under these circumstances it is essential to facilitate the change between trajectories and to allow for the possibility to select between a variety of alternative trajectories within a process of trial and error sustainability as viewed from this evolutionary perspective is therefore better understood as the general capability to adapt that is to readily change from less to more sustainable technological trajectories since the latter kind of sustainability determines the conditions under which the former kind i e sustainability related to a specific technology can be achieved the two kinds are respectively called second order and first order sustainability finally a series of determinants and corresponding indicators from the techno economic political and socio cultural sphere is identified which after proper measurement and weighting allow for making an assessment whether and when the incumbent industry is sufficiently destabilized and the political system rendered sufficiently favorable to the new more sustainable technology such that a transition to the preferred trajectory is possible without too much effort

the endogenous public choice theorist public choice theory has effectively explored defects in collective action and political processes however little attention has been given to the fact that any recommendations as to how to improve the situation can only be realized on the basis of precisely those defective institutions what turns up here can be identified as a problem of self reference normative contributions by buchanan and hayek may serve as an example in order to clear up the seemingly paradoxical situation endogenization of the public choice theorist within an extended theory is suggested a straight forward extension is briefly outlined

privatization in latin america what does the evidence say privatization is under attack criticisms run from corrupt deals to abuse of market power and social welfare losses we evaluate the empirical record on privatization relying on recent comprehensive studies from latin america the paper presents four main results first the increased profitability of privatized firms is not explained by sample selection biases second in the quest to identify the sources of increased profitability after privatization we find little evidence that validates concerns of generalized market power abuses exploitation of workers and lack of fiscal benefits third the manner in which privatization is carried out matters transparency and homogeneity in procedures speed and limited restructuring prior to privatization lead to better outcomes and less room for corruption and discretion finally privatization s success is enhanced by two complementary policies deregulation or reregulation of industries previously shielded from competitive forces and an effective corporate governance framework that facilitates privatized firms access to capital at lower cost overall the empirical record shows that privatization leads to increased profitability and productivity firm restructuring fiscal benefits output growth and even quality improvements most cases of privatization failure can be linked to poor contract design opaque processes with heavy state involvement lack of reregulation and a poor corporate governance framework

investment inefficiency and the adoption of eco innovations the case of household energy efficiency technologies abstract this paper examines the factors determining household adoption of energy efficiency eco innovations we do so by testing hypotheses grounded in diffusion and finance theory and the literature on the barriers to energy efficiency using two large surveys of uk households we explore the adoption of nine technologies our results indicate investment inefficiency amongst household adopters occurs for two reasons first contrary to notions of rational choice we find a negative relationship between the investment return of technologies and their level of diffusion second we show adopters of these technologies display characteristics broadly consistent with diffusion theory contradicting the prediction of finance theory that investment return not individual characteristics should drive adoption we also find that policy has played a role in inducing the diffusion of these technologies and that tenure and spill over effects are important in adoption finally adoption is motivated more by a desire to save money than by environmental concern we conclude by giving examples of how our research can lead to better policy timing and targeting

determinants of pro environmental consumption the role of reference groups and routine behavior abstract this paper investigates the determinants of pro environmental consumption focusing on the role of reference groups and routine behavior we study the factors that explain whether or not people have installed residential solar energy equipment or have subscribed to green electricity programs and the factors that influence the intensity of buying organic food in addition to demographic characteristics and environmental attitudes we consider the following categories of determinants economic and cognitive factors income estimated price premium level of information on environmentally friendly goods consumption patterns of reference persons own consumption patterns in the past using a unique data set from a survey conducted in the region of hanover germany we find the following 1 economic and cognitive factors are significant covariates of all three kinds of pro environmental consumption their influence is greatest in the case of green electricity 2 consumption patterns of reference persons are significant covariates of all three kinds of pro environmental consumption their influence is greatest in the case of organic food 3 the intensity of buying organic food is greater the longer people have been consumers of these goods

measuring research benefits in an imperfect market in this paper an imperfect market model is developed for evaluating agricultural research benefits the main finding is that the increases in societal gain and the producer s share of this gain are larger with a monopoly than with a competitive market the paper argues that if the market for an agricultural input or for a commodity is not competitive then use of a competitive model for assessing research benefits could lead to understatements of both producer and total benefits

the dynamics of willingness to consume abstract it is increasingly acknowledged that the growing consumption in the north constitutes an important part of global environmental problems to improve the possibilities of dealing with this aspect of the problems this paper explores some of the driving forces behind the growth in consumption the first section introduces the environmental debate on consumption including the relationship between final consumption and the consumption of resources the recent political acceptance of dealing with consumption and the fundamental conditions for consumption growth in the north in the following sections a cross disciplinary approach is applied in a broad search for the driving forces behind the willingness to consume throughout the exposition two questions are explored 1 why are productivity increases largely transformed into income increases instead of more leisure 2 why is such a large part of these income increases used for the consumption of goods and services with a relatively high materials intensity instead of less material intensive alternatives the explanations are divided into three groups first the economic explanations including socio economic aspects related to the institutional set up of the economy second socio psychological explanations focusing on consumption from the perspective of the human being embedded in specific social relations third historical and socio technological explanations focusing on different aspects of everyday life the paper concludes with some reflections on the political implications of the analysis

can sustainable consumption be learned a model of cultural evolution abstract this paper shows how sustainable consumption patterns can spread within a population via processes of social learning even though a strong individual learning bias may favor environmentally harmful products we present a model depicting how the biased transmission of different behaviors via individual and social learning influences agents consumption behavior the underlying learning biases can be traced back to evolved cognitive dispositions challenging the vision of a permanent transition toward sustainability we argue that green consumption patterns are not self reinforcing and cannot be locked in permanently

measuring research benefits in an imperfect market second comment this note generalizes a finding about the necessary and sufficient conditions for research to generate greater benefits in the presence of distortions and highlights a significant source of bias in conventional cost benefit calculations

large scale privatization in transition economies to explain the slow progress of mass privatization programs in eastern europe the authors present a model based on a positive spillover between aggregate privatization and the individual expected return to privatization derived from a potential populist backlash if costly reforms do not bring forth sufficient aggregate privatization the model allows for the simultaneous existence of a pessimistic zero privatization trap and an optimistic full privatization equilibrium defined by a critical mass of expected privatization while both privatization subsidies and minimum income guarantees can by themselves secure coordination on the optimistic equilibrium the financing constraint may offset the direct effect copyright 1993 by american economic association

can you teach old dogs new tricks on complementarity of human capital and incentives abstract contract theory suggests that firm performance can be improved by appointing new managers and or by introducing better incentives furthermore these two changes should be complementary their effects reinforce each other using data on privatized firms in the czech republic this paper presents results that suggest complementarity between the appointment of new managers and introduction of incentives in a transition economy the results also show that ignoring the complementarity may lead to the wrong conclusion that the effect of incentives is weak managerial incentives seem to work only after the new post privatization managers are appointed

the opportunity criterion consumer sovereignty without the assumption of coherent preferences this paper proposes a formulation of consumer sovereignty for use in normative economics which does not presuppose individuals preferences to be coherent the fundamental intuition that opportunity and responsibility have moral value is formalised as a responsibility criterion for assessing opportunities in an economic system a model of an exchange economy is presented in which rational arbitrageurs compete to make profits by trading with non rational consumers in equilibrium this economy satisfies the responsibility criterion one interpretation of this result is that in a competitive environment the overall effects of money pumps are benign even if individuals preferences are persistently incoherent

measuring research benefits in an imperfect market voon 1994 recently analyzed the benefits of research in an imperfectly competitive market for an agricultural input studies of this type are important because the agricultural industries are becoming more concentrated and agricultural economists have begun to focus more attention on the implications of imperfect competition in the food and fiber sector the magnitude and distribution of research benefits under alternative market structures are important from both the perspective of agents incentives to undertake investments in research and allocating public monies to support research voon specifically compared the welfare benefit from a cost reducing innovation for an agricultural input under conditions of monopoly to perfect competition in the supply of the input the analysis was based on a framework of linear farm demand for the input and linear and rising marginal cost of supplying the input the key result based on simulations of the market equilibrium under alternative demand and cost elasticity configurations was that research benefits were greater under monopoly than under perfect competition this result is wrong specifically for

the case for methodological pluralism abstract ecology and economics share the same greek root both address complex systems ecology consists of numerous approaches to understanding natural systems energetics population biology food web models hierarchy theory to mention just a few within ecology field knowledge and the reporting of new observations are well respected economics on the other hand is dominated by one pattern of thinking and standard of proof the market model and econometrics within economics field knowledge and observations per se are little valued agreement on a correct method is frequently taken as an indication of the maturity of a science the argument is developed in this paper that all the aspects of complex systems can only be understood through multiple methodologies the agreement on method within economics however seems to reflect stronger pressures within the discipline for conformity than for truth relative to ecology since ecological economics seeks to understand a larger system than either economics or ecology seeks to understand a diversity of methodologies is appropriate and pressures to eliminate methodologies for the sake of conformity should be avoided

ftt power a global model of the power sector with induced technological change and natural resource depletion abstract this work introduces a model of future technology transformations for the power sector ftt power a representation of global power systems based on market competition induced technological change itc and natural resource use and depletion it is the first component of a family of sectoral bottom up models of technology designed for integration into the global macroeconometric model e3mg itc occurs as a result of technological learning produced by cumulative investment and leads to highly nonlinear irreversible and path dependent technological transitions the model uses a dynamic coupled set of logistic differential equations as opposed to traditional bottom up energy models based on systems optimisation such differential equations offer an appropriate treatment of the times and structure of change involved in sectoral technology transformations as well as a much reduced computational load resource use and depletion are represented by local cost supply curves which give rise to different regional energy landscapes the model is explored for a single global region using two simple scenarios a baseline and a mitigation case where the price of carbon is gradually increased while a constant price of carbon leads to a stagnant system mitigation produces successive technology transitions leading towards the gradual decarbonisation of the global power sector

measuring research benefits in an imperfect market second reply in a recent comment on voon 1994 holloway 1999 has made the following conclusions under conditions that are almost identical to ones considered by voon 1994 and by sexton and sexton 1996 pivotal shifts in marginal costs generate strictly greater benefits under monopoly this paper reconsiders the above conclusion a simple geometric approach similar to alston et al 1988 and voon and edwards 1991 is used for the reassessment the analysis shows that a pivotal shift in the marginal costs generates greater benefits under perfect competition than it does under monopoly this is opposite to holloway s finding the model is depicted in fig 1 instead of a parallel shift in the mc curve as in voon 1994 a pivotal shift above the origin is assumed this implies that the supply price elasticity is greater than unity e 1 see voon and edwards 1991 under monopoly

look at me saving the planet the imitation of visible green behavior and its impact on the climate value action gap abstract examining the regional distribution of 15 different greenhouse gas mitigation practices mps across australia we study the tendency for consumers to imitate visible pro environmental behavior in their local region while there is a great deal of variation in the specific type of mps adopted by consumers located in the same region anova results suggest that they tend to adopt a similar number of mps as their neighbours using discrete choice modelling our results suggest that this is due to the peer adoption of certain visible mps such as using public transport or car pooling encouraging agents to adopt other types of visible mps however the character of this spillover is limited in that visible pro environmental behavior does not appear to influence the adoption of non visible mps we also find that social imitation patterns help individuals overcome the observed gap between their stated concern about climate change and their propensity to act on this concern known as the climate value action gap policy implications for designing effective green nudges are discussed

technological diffusion and preference learning in the world of homo sustinens the challenges for politics abstract this article relates agents learning of a preference for a technology competition of technologies and their relative diffusion among potential adopters competitive interactions between two technologies are captured by an extended lotka volterra model to also incorporate preference learning on the part of potential adopters of these technologies we combine it with a model of cultural learning based on role model conformist and hedonistic learning our theoretical analysis is illustrated by a concrete example the competition between electric mobility and conventional forms of individual mobility the model enables an evaluation of specific policy instruments as to the promotion of sustainable technology

privatization under political interference evidence from eastern germany abstract can privatization authority be successfully delegated to a privatization agency to address this question we examine the liquidation policy of the german privatization agency the theoretical part develops a dynamic model of optimal liquidation under incomplete political insulation of the privatization agency we explore how external political interference affects its liquidation policy and derive testable implications for the distribution of liquidation decisions and privatization prices the empirical part uses micro data on 1804 privatization contracts and 1097 liquidation decisions to verify the model predictions the data confirm the view that political liquidation constraints are an important determinant of privatization outcomes

evolutionary psychology in ecological economics consilience consumption and contentment abstract this paper makes the case that if ecological economics seeks consilience with biology it must acquaint itself with evolutionary theories about social development and human behaviour the author reviews some of the literature in this area particular attention is paid to the newly emerging discipline of evolutionary psychology which sets out a neo darwinian view of human nature in which individual and social behaviour is dominated by the evolutionary strategies of the selfish gene the paper discusses the relevance of this perspective for two specific problem areas in ecological economics the first of these is the question of consumption and consumer behaviour the second is the problem of mismatch between the pursuit of economic growth and social well being or contentment these examples illustrate that evolutionary psychology may sometimes provide a natural ally for ecological economics in particular pointing up certain failures of conventional economics on the other hand it also offers harsh lessons concerning the difficulty of changing evolved behaviour patterns the paper suggests three possible avenues of response by ecological economists to the insights of evolutionary psychology

the financial and operating performance of privatized firms during the 1990s this study compares the pre and postprivatization financial and operating performance of 85 companies from 28 industrialized countries that were privatized through public share offerings for the period from 1990 through 1996 we document significant increases in profitability output operating efficiency and dividend payments and significant decreases in leverage ratios for our full sample of firms after privatization and for most subsamples examined capital expenditures increase significantly in absolute terms but not relative to sales employment declines but insignificantly combined with results from two previous directly comparable studies these findings strongly suggest that privatization yields significant performance improvements during the past two decades the privatization of state owned enterprises has moved from being a radical almost desperate policy initiative of the thatcher government in britain to being an accepted economic policy for governments of all ideological stripes according to gibbon 1998 860 billion has been raised by governments worldwide through privatizations with the bulk of this total coming since 1987 and at least one commentator roche 1996 predicts that no less than 6 trillion will be raised through privatizations over the next two decades in 1997 alone sales of public enterprises totaled a record 161 billion worldwide with more than 110 billion of the total coming during the second half of the year and 1998 s total of almost 140 billion indicates that the pace shows no sign of slackening as we approach a new millennium

the performance of privatized firms in the czech republic abstract with the growing importance of privatizations as a part of government policy most empirical studies of these privatizations conclude that firm performance immediately improves following privatization privatization has been the most important part of the transition from the centrally planned economies of central and eastern europe and has a larger impact on those economies than privatizations in other countries however few studies have looked at the performance of firms following mass privatization this study uses 453 separate firms 101 firms privatized in both waves for a total of 554 observations in the first and second waves of czech voucher privatization using methodology from previous studies we find that while the overall effects from privatization are positive the effects vary by privatization wave size and industry firms privatized in the first wave performed worse decline in performance following privatization than firms privatized in the second wave we also fail to find ownership concentration or debt as an important factor in restructuring the firm i believe that the results are consistent with two hypotheses first economic and political structure surrounding the privatization waves plays an important part in the success of privatization stable environments both political and economic help privatized firms restructure and improve operating performance as well as attract foreign investors and capital even in less developed countries but in transitional economies undergoing mass privatization in rapidly changing and developing economic and political environments hinder firms from restructuring and improving performance following privatization results are also consistent with the hypothesis that firms with a longer preparation period prior to privatization an implicit seasoning improve performance following privatization

priorities and sequencing in privatization evidence from czech firm panel data abstract while privatization of state owned enterprises has been one of the most important aspects of the economic transition from a centrally planned to a market system no transition economy has privatized all its firms simultaneously this raises the question of whether governments privatize firms strategically in this paper we examine the determinants of the sequencing of privatization to obtain testable predictions about the factors that may affect sequencing we investigate the following competing government objectives i maximizing efficiency through resource allocation ii maximizing public goodwill from the free transfers of shares to the public iii minimizing political costs iv maximizing efficiency through information gains and v maximizing privatization revenues next we use firm level data from the czech republic to test the competing predictions about the sequencing of privatization consistent with the hypotheses of a government priority on revenues and public goodwill we find strong evidence that more profitable firms were privatized first the sequencing of privatization is also consistent with maximizing efficiency through information gains our results indicate that many empirical studies of the effects of privatization on firm performance suffer from a selection bias

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

understanding the uneven diffusion of building scale renewable energy systems a review of household local and country level factors in diverse european countries abstract this review focuses on renewable energy technology deployment in residential buildings which is part of current targets to develop net zero carbon buildings in europe and to promote the deployment of renewable energy we focus on the adoption of four technologies heat pumps solar photovoltaics solar thermal systems for domestic hot water and space heating and advanced biomass heating while there are several studies on households investment criteria a research gap exists because building owners across europe are quite diverse and the european markets exhibit different stages of maturity this article conducts a critical review of the literature on the diffusion of building scale renewable energy solutions in order to answer the following questions 1 to what extent can findings from studies on household adoption criteria be generalized from one country to another and 2 what insights does the literature offer on factors that might explain the differences in adoption patterns between european countries

the life cycle of a competitive industry firm numbers first rise then later fall as an industry evolves this nonmonotonicity is explained using a competitive model in which innovation opportunities fuel entry and relative failure to innovate prompts exit equilibrium time paths for price and quantity also share features of the data the model is estimated using data from the u s automobile tire industry a particularly dramatic example of the nonmonotonicity in firm numbers

green preferences as regulatory policy instrument abstract we examine here the suggestion that if consumers in sufficient numbers are willing to pay the premium to have power generated using low emission technologies tax or permit policies become less necessary or stringent while there are implementation difficulties with this proposal our purpose is more fundamental can economics make sense of using preferences as a regulatory instrument if green preferences are exogenously given to what extent can or should they be regarded as a substitute for other policies even with green preferences production and consumption of polluting goods continue to impose social costs not borne in the market moreover if green preferences are regarded as a policy instrument the no policy baseline would require a problematic specification of counterfactual non green preferences viewing green preferences as a regulatory policy instrument is conceptually sensible if the benchmark for optimal emissions is based on value judgments apart from the preferences consumers happen to have if so optimal environmental protection would be defined by reference to ethical theory or even less favorably by prescriptions from policy advocates who give their own preferences great weight while giving those of the public at large and the costs they bear very little consideration

market distortions and benefits from research the benefits from cost reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies while any price policy affects the distribution of research benefits the net national or world benefits may be reduced lef unchanged or increased depending on the nature of the policy and the significance of the country in the world market for the commodity some implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised

privatization and efficiency differentiating ownership effects from political organizational and dynamic effects this paper argues that the private public ownership factor should be differentiated from other factors that also influence the effect of privatization on efficiency this is empirically confirmed in a longitudinal study of 24 spanish firms for which several political and organizational factors are found to influence the estimated effects of privatization on efficiency the analysis of the timing of the effects reveals a strong significance for post privatization years 5 6 negative and 7 8 positive this suggests that the negative effect of these factors is transitional being eventually offset by the positive effects of the change to private ownership 2000 elsevier science b v all rights reserved jel classification l33

rigorous speculation the collapse and revival of the north korean economy abstract in this paper we use cross entropy estimation techniques to construct the underlying data base for a computable general equilibrium model cge of the north korean economy starting from incomplete data ridden with gross measurement errors the cross entropy estimation approach is powerful and flexible allowing us to make full use of what information we have in whatever form cge modeling forces internal consistency the end product is a model that incorporates fragmentary information in a rigorous way and allows us to examine the implications of a number of alternative scenarios including rehabilitation of flood affected lands liberalization of the international trade regime and military demobilization north korea has been experiencing a famine its economy is characterized by systemic distortions and comparative disadvantage in the production of grains as a consequence the potential payoffs to economy wide reforms even defined narrowly in terms of domestic food availability dwarf more targeted attempts to raise agricultural productivity to many this finding that a famine might be better addressed by the export of manufactures than the recovery of flood damaged lands is a striking and counterintuitive result moreover we find that if reforms were to be undertaken the country could generate a significant additional peace dividend by partially demobilizing its enormous military

rigidity of social systems the tendency for the members of a corporation or government to be resistant to change is explored in a model that encompasses two endemic features of such systems first the social system is modeled as a hierarchy and implicit within it is a selection process that determines who advances to higher levels second an agent s behavior is partially determined by imitating those who have risen in the ranks a behavioral norm of being rigid is found to be more prevalent and robust than one of being flexible a more volatile environment may also induce agents to be more resistant to change admirandi sed imitandi to be admired but not imitated st augustine

measuring research benefits in an imperfect market reply to holloway voon s original claim voon 1994 was that the benefits of generating through research a parallel shift in a monopolist s marginal cost curve exceeded the benefits from generating the same shift if the curve represented the market supply curve for a competitive industry as we noted in a subsequent comment this result was wrong with voon s error being due to the use of incmrect normalization procedures in his simu lation analysis we further articulated the general principle that welfare from an innovation in a mono poly industry would be greater than in a structurally equivalent competitive industry if and only if the deadweight loss due to monopoly decreased as a consequence of that innovation finally we opined that this condition will normally not be met in mono poly or other imperfectly competitive structures because in seeking to capture benefits from the inno vation a monopoly or oligopoly industry will generate less output expansion than would occur under perfect competition thereby causing the deadweight loss to increase