Transaction Costs: High - ANS-Non-coecien bargaining, in-efficent
Transaction Costs - ANS--search costs, locate exchange partner
- Barganing costs, time, language barrier, contract costs, hidden info, property rights
-enforcement costs, monitoring costs, punishment mechanism
Damages=externalities - ANS--when one firm or person elects to stay and simply pay off the
other person for the damages, or settle at a certain price.
Coecien Barganing - ANS--50/50 payoff, the two firms meet a mutually beneficial situation and
split the surplus of "x"
When transaction costs are high, damages are more efficient and cheaper than property rights -
ANS-
Agency Pricing Model - ANS-- steve jobs, gets all publisher together, illegal, publisher sets price
at 12.99, 30% goes to retailer
-resets price, most foundation class, apple gets back the best price
Cash For Kidneys - ANS--100,000 for kidneys on the black market, 5,000 deaths a year. why
not just go to the black market or other countries where you can get these ?
- power to rich people, poor to poor, dual state citizenship to get around these laws
-excess demand that is taken advantage of
-
Burberry/Blood Diamond/ Supply manipulation - ANS-- lower quantity of diamond for sale, drives
the price up for those with the diamonds supply
- burberry is burning high quality luxury goods and clothing to limit their supply on what they
believe should be luxurious and exclusive(high priced)
Monopoly diagram - ANS-- demand = Price equation
-marginal revenue, same intercept twice as steep
-mc=q
-one seller, no close substitute, barriers to enter
HIV Epidemic - ANS-No monopoly potential in developing countries, no one can afford their
current price levels...
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