When I teach about monopoly, I like to use an example first described to me by Walter Williams, which is marriage.
Marriage is a monopoly in that my wife and I have both forsworn allowing others to compete with us to supply the other with love services. (That is "love" services, not just sexual services.) I don't have to come home to see a line of men vying to provide my wife attention and gentleness and offer to take her to dinner and the ballet. Neither does she have to deal with a line of women vying to do the same for me (except the ballet part). Like any good monopoly then, you can expect to receive a lower quality product at a higher price.
Luke Froeb offers a more positive view of marriage, which is the post investment holdup. (I'll have to begin including this side of the coin in my lecture.)
When I got engaged, my fiance and I had to go through pre-marital counseling with a priest, and he asked us why we wanted to get married.
I said “Long-term relationships induce higher levels of relationship-specific investment.”
The priest looked as if he didn’t understand, so I said “you know, the kind of investments that differentiate a marriage from a series of meaningless spot-market transactions.”
On our first anniversary, my wife gave me a card declaring that “her relationship-specific investment was earning an abnormally high rate of return.”
NB: For my wonderful and beautiful wife: I do include this view of marriage in my lectures, just not in such eloquent and applicable terms.
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