Discussion 1: Monopoly - Readings

Tuesday, February 18, 2020

Required Readings:

• Thiel (2014), Zero to One Chs. 3-5Sorry about the quality of the PDF if that is what you use to read it. The required reading starts on page 17, “All Happy Comapanies Are Different”, through the end of the document.
  
  

You are required to read chapters 3-5, though I highly recommend you read chapters 1 and 2 as well. This is a very short (and hopefuly interesting and readable) book, so reading many chapters from it is not as daunting as it sounds!

Focus on what Thiel has to say about competition and monopoly, and look for things that sound different from what we learn in our textbook/blackboard models (i.e., that we have been covering).

This will be the first major reading and discussion that we will have this semester. It will be a little while until our next one (again, we are still stuck in the “theory” \(\frac{1}{3}\) of the course).

Before we begin on Tuesday, I will explain how we will hold discussions, as well as provide more context for you to interpret the readings. Before class Tuesday, please email me 2-3 questions about the reading (that somehow indicate that you’ve read it).So not questions that can, for example, be answered in a sentence!

Questions and Tips to Guide Your Reading

In combination with the lectures and all the readings, think about:

• How can we precisely define monopoly? i.e. how do we “know it when we see it”?

• How are the economic models (i.e. fictional constructions) of “perfect competition” and “perfect monopoly” useful and/or useless for reality?

• Can monopolies emerge (and persist) naturally in the market, or does monopoly always require government intervention?

• Is monopoly “good,” “bad,” or some combination?

• What are the benefits of monpoly, according to Thiel?

• Where does creativity and innovation come from?

• What’s the difference between “first-mover advantage” and “last-mover advantage,” according to Thiel?

• How do you think we should view eccentric billionaires spending millions of money on things like life extension, cryogenics, space tourism, etc?