Positive externality, increasing returns, and the rise in cybercrimes

Consumption externality and indeterminacy under increasing returns to scale and endogenous capital depreciation

Article history: Accepted 17 January 2014 Available online 15 February 2014 JEL classification: C62 E21 E22

The Economics of Increasing Returns

Increasing returns is the source of some of the most powerful metaphors and intuitions in economics. Foremost among them are Adam Smith's statement that the division of labor is limited by the extent of the market, and his discussion of the relationship between scale and economies of specialization in a pin factory. There is a weakness, strictly an error, in Adam Smith's analysis. Two phenomena...

Increasing Returns and Economic Efficiency

This paper argues that, from the viewpoint of Pareto optimality, the industries with increasing returns are under-expanded relative to those without increasing returns and those with higher degrees of increasing returns are under-expanded relative to those with lower degrees. Ignoring administrative and indirect (such as rent-seeking) costs, subsidies on goods produced under conditions of (high...

Planning, Prices and Increasing Returns

Equity, Efficiency and Increasing Returns