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.

A tiny bit on the shadow banking system

http://www.voxeu.org/index.php?q=node/7278

A must-read from today's WSJ

http://online.wsj.com/article/SB10001424052970204394804577010102084351834.html

"Culture Built on Family Firms Tests Italy's Plan for Growth," by Stacy Meightry and Deborah Ball, google to it if the link above expires.

excellent article

http://online.wsj.com/article/SB10001424052970203503204577036003036334374.html

If that link doesn't work for you, google "patents, antitrust world collide" it is by Thomas Catan from WSJ.

New article on Google

http://www.nytimes.com/2011/11/10/technology/googles-chief-works-to-trim-a-bloated-ship.html?hp

Could have been better and more insightful, still interesting and related to our discussions in class.

Another meal together

For those of you who couldn't make the last one, and who would like to do one, what are good times? It is fine to answer anonymously, leave the information in the comments.

I will also aim toward another China Star meal on Tuesday at 5, a bit later on.

Interesting bit on non-profit hospitals and the IRS

Read it here.

Rodrik

There is a revised and clearer version of the "Unconditional Convergence" piece in the NBER Working Paper Series, same basic idea, no need to reread, but if you end up working on this, just fyi...

More on small firms

http://thinkprogress.org/yglesias/2011/10/26/353512/italian-firm-size-the-battle-rages-on/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+matthewyglesias+%28Matthew+Yglesias%29, and check back on the MR posts I wrote on the topic this week, if you haven't read them already.

Another email address I could not read

My comment:

"Good topic, make sure you think through how to adjust for rapid adoption of cell phones in Africa..."

More behavioral IO?

One of many reports:

"Steve Jobs regretted what may have been a fatal mistake in putting off cancer surgery for nine months as he tried experimental diets and other unconventional therapies, according to the author of his new biography."

Tuesday, China Star at 5 (sharp)

Fairfax, Fair City Mall, near the FedEx, Rt.236 and Pickett.

I could not read your email

Here was my comments on your abstract:

Does it make sense to use *population density* as measuring school density?

You also will need to adjust for other factors affecting academic performance.

Good story on behavioral IO

http://online.wsj.com/article/SB10001424052970203752604576640923370662418.html

If that link isn't working, google to "A Food Fight in the Produce Aisle," from the WSJ. Read the "interactive graphics" section also, click through to get there.

New paper on the firm

Read the abstract of this paper, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1527098, the rest of the paper is strictly optional, only if you are interested. Nonetheless it shows some new directions for the "theory of the firm" literature.

Note

On the reading list, the optional are these only:

Optional: Charness, Gary and Kuhn, Peter J. “Lab Labor: What Can Labor Economists Learn From the Lab?” NBER Working Paper, 15913, 2010, Lazear, Edward P. “Leadership: A Personnel Economics Approach,” NBER Working Paper 15918, 2010, Oyer, Paul and Schaefer, Scott, “Personnel Economics: Hiring and Incentives,” NBER Working Paper 15977, 2010.

Not what follows below.

Quizzes

To be clear, the quiz for the week to come will be on the Morris book. The theory of the firm readings will be for the quiz for the class after that, all of them together.

a' la carte for cable?

Rumors!: http://www.reuters.com/article/2011/09/27/cable-idUSS1E78K05L20110927

The economics of groupon

http://blogs.reuters.com/felix-salmon/2011/09/26/notes-on-groupon/

For anyone following Netflix

http://www.nytimes.com/2011/09/26/business/media/netflix-secures-streaming-deal-with-dreamworks.html?_r=1&hp

Good paper on radio stations

http://econ.duke.edu/~atsweet/SWEETING_MEfinal.pdf

Just view the abstract, the rest is optional.

A new diamonds story

http://www.ft.com/intl/cms/s/0/07c85cbc-debf-11e0-a228-00144feabdc0.html#axzz1Yjq8rsMD

More views on Netflix

http://andrewsullivan.thedailybeast.com/2011/09/netflixs-gamble-ctd2.html

Reasons for dividing

Good post from a theorist at Northwestern:

http://cheaptalk.org/2011/09/21/two-reasons-to-divide-that-dont-apply-to-netflix/

Antitrust piece

Maybe this isn't quite economics, but it gives an alternative and somewhat scary perspective on antitrust law:

http://www.ft.com/intl/cms/s/0/1d923292-e0b9-11e0-947a-00144feabdc0.html#axzz1Y6zwotOC

US authorities are using a little-known immigration provision to secure guilty pleas by foreign businessmen in antitrust cases, a move defence lawyers say unfairly presses non-US executives into co-operating with investigations.

The tactic is likely to be brought to bear in the ongoing US and UK investigation into alleged collusion in the setting of the London and Tokyo interbank markets, which has ensnared US, European and Japanese banks and their employees. No individuals have been charged with any wrongdoing.

Two good analyses of the Netflix move

http://www.theatlantic.com/business/archive/2011/09/the-qwikster-and-the-dead/245303/

http://blogs.reuters.com/felix-salmon/2011/09/19/with-all-due-respect-to-reed-hastings-the-netflix-qwikster-split-sucks-for-customers/

Is it so stupid? Read this

http://kottke.org/11/09/netflix-explodes-into-two-companies

Google before the antitrust authorities

Read more here

Tirole chapter

One source tells me the chapter on predation is not on reserve, I will look into it, if you know more please make a note in the comments.

Update: I am told this is now on electronic reserve.

AT&T tries to save the deal

The story is here

The silent run on European banks

Some details here.

An interesting take on the federal guidelines behind the cell phone case

Read it here.

Email I received

"Dear Prof. Tyler Cowen,

Electronic Reserve for: ECON 844 - Section 001 - Fall 2011

Your password is: industry

Do not use spaces or caps for passwords.

Please inform you students of this information, as they will need the above password when accessing your reserves material"

A minor antitrust victory for Google

Here, and a brief survey of antitrust under Obama, here.

A good article on T-Mobile

Read it here, there is already more news in antitrust than I thought we would see all semester!

Clarity on the merger

In case you have trouble following telecom mergers, this diagram should clarify everything. And here is the union argument in favor of the now-thwarted merger, a good quick case for it.

Unexpected news

The U.S. blocks the AT&T and T-Mobile merger, read about it here.

The Rodrik essay

Here is the link to the extra Rodrik essay, for the productivity section, which is not on all of your reading lists:

http://www.hks.harvard.edu/fs/drodrik/Research%20papers/The%20Future%20of%20Economic%20Convergence%20rev2.pdf

It goes with the short Rodrik blog post already listed.