Chapter 1. Introduction 5

Chapter 2. Devastating Implications of Increasing Returns on Some Traditional Conclusions 15

Chapter 3. Equity and Efficiency vs. Freedom and Fairness: An Inherent Conflict 32

Chapter 4. Existence of Average-Cost Pricing Equilibria with Increasing Returns 55

Chapter 5. The Efficiency of Encouraging Goods with High Degrees of Increasing Returns 62

Chapter 6. Division of Labour: Increasing Returns at the Economy Level 72

Chapter 7. The Smith Dilemma and Its Resolution 99

Chapter 8. Why Should Governments Encourage Improvements on Infrastructure? Indirect Network Externality of Transaction Efficiency 114

Chapter 9. Average-cost Pricing, Increasing Returns, and Optimal Output: Comparing Home and Market Production 130

Chapter 10. Do the Economies of Specialization Justify the Work Ethics? An Examination of Buchanans Hypothesis 155

Chapter 11. Specialization, Trade and Growth 195

Chapter 12. Conceptual and Policy Implications: Concluding Discussion 213