Modern Industrial Org. – Post Midterm Study Notes October 19/2010 Product Differentiation and Monopolistic Competition Differentiated Products • Products considered differentiated when consumers view as imperfect substitutes • Could be products of different firms or different brands produced by same firm • Implies that a firm can raise price without losing all demand • Example: o Frozen orange juice o Bottle water o Cola o Ready-to-eat breakfast cereal o Automobiles Two Issues
Words: 5314 - Pages: 22
The rational behind the economic theory of choice is to choose out of certain economic outcomes and representing the preferences through maximisation of the utility function of the outcomes. As per the von Neumann-Morgenstern expected utility model (1953), which is the workhorse of recent economics, the choices are made by people, so as to get the maximum utility. These preferences are based on intuition, self interest, past experiences etc. The main idea is under certainty is that if the preferences
Words: 3819 - Pages: 16
Access Pricing Principles — Telecommunications July 1997 Preface Part XIC of the Trade Practices Amendment (Telecommunications) Act 1997 introduces a new regime governing access to services in the telecommunications industry. A key component of this regime is the pricing of access which, in part, is to be administered by the Australian Competition and Consumer Commission. The purpose of this document is to outline the approach the Commission will adopt, in the usual case, when considering
Words: 13617 - Pages: 55
The Business Cycle 2.5.2 Permanent Technology Shocks 2.5.3 Temporary Technology Shocks 2.5.4 The Stability and Dynamics of the Golden Rule Revisited 2.6 Labor in the Basic Model 2.7 Investment 2.7.1 q-Theory 2.7.2 Time to Build 2.8 Conclusions Economic Growth 3.1 Introduction 3.2 Modeling Economic Growth 3.3 The Solow–Swan Model of Growth 3.3.1 Theory 3.3.2 Growth and Economic Development xiii 1 1 3 4 7 12 12 12 14 14 16 17 17 19 20 20 21 23 25 27 27 28
Words: 188884 - Pages: 756
Fall 2010 Case Discussion Questions Instructor: Professor Edward H. Chow 周行一 Case study: financial bubble Case: Trouble with a bubble (9-808-067) 1. Why did Irving Fisher believe that stock prices had reached a permanently high plateau? 2. Why did the stock market crash in 1929? 3. Why did influential individuals like Fisher, Keynes and Rockefeller believe that the downturn would only be temporary? Case study: investment banking business and global financial crisis Case: Investment
Words: 1896 - Pages: 8
Altman, Edward I. and Vellore M. Kishore. 1996. “Almost Everything You Wanted to Know about Recoveries on Defaulted Bonds.” Financial Analysts Journal. Vol. 52, No. 6: 57−63. Altman, Edward I., R. Haldeman, and P. Narayanan. 1977. “Zeta Analysis: A New Model to Identify Bankruptcy Risk of Corporations.” Journal of Banking and Finance. Vol. 1: 29−54. Ambachtsheer, Keith, Ronald Capelle, and Tom Scheibelhut. 1998. “Improving Pension Fund Performance.” Financial Analysts Journal. Vol. 54, No. 6: 15–21. Ambachtsheer
Words: 12603 - Pages: 51
Efficient Capital Markets: Evidence 1. Roll’s critique (1977) is based on the assumption that capital markets are in equilibrium. What happens when the market is not in equilibrium? Suppose new information is revealed such that the market must adjust toward a new equilibrium which incorporates the news. Or suppose that a new security is introduced into the marketplace, as was the case of new issues studied in the Ibbotson (1975) paper. Given such a situation, the abnormal performance of an asset can be
Words: 11793 - Pages: 48
MBA Program Course: Financial Analysis and Decision Making MBA730 Instructor: Marlena L. Akhbari Wright State University Finance and Financial Services McGraw-Hill/Irwin =>? McGraw−Hill Primis ISBN: 0−390−42334−3 Text: Case Studies in Finance: Managing for Corporate Value Creation, 4/e Bruner This book was printed on recycled paper. MBA Program http://www.mhhe.com/primis/online/ Copyright ©2003 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States
Words: 54708 - Pages: 219
2 Study of the theoretical fundamentals of the modern portfolio theory In the first paragraph we show the crucial differences between the modern portfolio theory and pre-Markowitz one, summarize the mathematical framework of the MPT and critically evaluate the core assumptions building the MPT. This paragraph is devoted to the second stage of the portfolio selection process assuming that all input parameters of the model are true. 2.1 Definition of the modern portfolio theory Harry Markowitz
Words: 1409 - Pages: 6
Beware of Price-to-ebitda Ratios P/E Ratios and Dividends Price-to-sales Multiples During the Internet Bubble Multiple Comparison Methods and Chain Letters Asset-based valuation: Break Up Values Firms Trading as Market Values less than Net Assets No Arbitrage: the Law of One Price How Share Prices are Arbitraged Negative Stub Values Expectational Arbitrage and the Risk of Arbitraging
Words: 10037 - Pages: 41
