Final exam

A double check with the Registrar indicates start time is at 7:30, we will start then, not at 7, apologies for the mix-up.

Exam

We will do two hours and fifteen minutes, as I had mentioned would be possible, starting at 7.

I have not done up the test yet but most likely there will be four questions, and you are likely to have some choice in what you answer, something like "pick four out of six."

On slotting fees, not enough people considered:

1. What are the potential externalities here?

2. What is the potential market power?

3. If slotting fees are banned, might a manufacturer offer a lower per unit price (higher profit margin for the retailer) to try to bring about the same result? Would that bring about the same result, or not? etc.

New book

Very valuable, strictly optional:

http://www.amazon.com/Masters-Management-Business-Changed-Better/dp/0061771139/ref=sr_1_1?ie=UTF8&qid=1323091337&sr=8-1

Here is part of a copy of a final exam

...from a previous year. Don't assume that they studied exactly what we did, by no means was that the case.


1. “Exclusive territories” arise when a franchise is given license to operate, provided it is not too close geographically to another franchise. McDonald’s uses this practice, I believe. Write and answer your own analytical question about exclusive territories. You will be graded on the quality of the question as much as on your answer. Pick a question that allows for rich and analytical answers.

2. Corporate takeovers are less common in most countries than in the U.S.. Why might this be? What are the advantages and disadvantages of relying so much on takeovers to improve corporate performance?

3. One recent proposal is to take the hard-to-value mortgage assets on the books of many banks and package them into new, bundled form. Imagine the government buying up these complex mortgage securities, bundling hundreds or thousands of them together, and then selling equity in the resulting bundles. In essence the government is creating new “corporations” which do little other than receive mortgage payments.

Under what theory of the world would this help the financial crisis? But does it matter at all? What are the conditions under which this could help solve the problem? Exactly which problem would it be solving? If it matters, which assumption(s) from the Modigliani-Miller theorem is in this case failing to hold?

An interesting short bit on IO

http://theincidentaleconomist.com/wordpress/in-defense-of-reduced-form-models/

Practice question

You will find it in the comments. Here is the deal: don't read it in advance, write out your answer under *timed exam conditions* (say 20 minutes, with a timer), type out your answer, bring it to class next Tuesday (nine days from now), and put your email on the paper.

If you do all those things, I will grade your answer.

New paper on the firm

http://econ-www.mit.edu/grad/mlp/papers, strictly optional though it looks quite interesting, from a guy on the MIT job market.

I'll get you practice questions very soon!

Spread of yields on French vs. German debt

View it here:

http://blogs.ft.com/the-world/files/2011/11/FrGer_301.jpg

Scary.