Fall 2018, Economics 243
Midterm #2 — Economics of Strategy
Due Thursday November 15 at 5 pm
- Use jargon, draw / provide formal models as appropriate.
- Self-timed takehome: 100 minutes / equally weighted ≈ 10 minutes for each
- Handwritten is fine, it makes including graphical models easier.
- AB InBev should rationally ignore craft brewers. They are no threat to their core business.
- Movie theaters offer discounted senior tickets (and sometimes student ones) but have expensive concessions. Why?
- Driving rivals from the market is shooting yourself in the foot. It’s much better to engage in strategies to discourage potential rivals from ever entering the market.
- Now that they have stopped growing, McDonalds should begin buying up their franchisees. Only then will they be able to fully exercise their market power.
- You didn’t become CEO to make shareholders rich – and why should you?
- Informative vs Persuasive
- Double Marginalization
- Fringe Firms