Signaling theory

I'll also cover signaling in more detail, read this short piece.

Next class

Yes we are having class next week. One problem I will cover in more detail is the motives for horizontal and vertical integration. Here is a thought problem to work through in the meantime. Let's say you own a set of apartment buildings. You can either call a plumber each time a problem arises, or have a plumber on permanent payroll (let's assume you have enough buildings so that this is a feasible option).

Under what conditions should you call a plumber each time and under what conditions should you put a plumber on payroll?

That's a problem with a plumber. You can make progress by switching the job description, and the associated capital goods, and then see what happens to your answer.

Why frontage?

Right now I'm in Texas and they have a highway system involving "frontage" roads; google to it if you don't already know the concept. Under what assumptions does a frontage system make sense?

The economics of broadcast TV

Read about it here.

Review Session

Please comment with questions or concepts for Thursday 11/19's 8pm review session, same room we have class. We'll go over the topics you all post on here first (with preference given to multiple requests for the same concept, so don't be afraid to repeat each other) and then open for additional questions if time permits.

Comcast and NBC

This is vague and doesn't offer much economics, but if you're curious on the background of the pending deal, here is one article. I would in any case stress that I try to make such questions independent of your knowledge of particular details.

The crisis of imprisonment

Read here.

Inventing a better patent system

Read here.

What economists don't understand about cell phone pricing

Here is an interesting article.

Article about for-profit prisons and messed-up incentives

Read it here.

Read this

From Felix Salmon.

Up-and-out schemes

As you probably know, a lot of law firms have "up-and-out" schemes. If you don't make partner by a certain number of years, you don't just hang around at a lower level of compensation. They expect you to leave and if need be they'll fire you.

Why is this? Is it just the factor of morale? Can you think of other possible explanations?

This is a good example of what I would consider to be a good exam question.

Markets in everything

Human cadavers.

Possible answers to the service charge problem

You'll find a few (of many) here, read the comments section too.

Super-simple questions

Let's say you want to get something fixed, say a car. One company will give you a free estimate of what the repair will cost. Another company charges for the estimate, meaning that you pay for the estimate whether or not you end up using their service.

Under what conditions should you go with the first company? The second company?

Like I said, a super-simple problem, like most of economics!

Again optional

Here is a new paper on the WTO.

Strictly optional

Here is my 18-minute TED talk, as I said strictly optional.

A new antitrust clearance to be required?

Comcast and NBC.

A new piece on the book price wars

Here.

Economists make *Jeopardy!*

Here.