Economics 243 Fall 2018

from Brewers Association US Breweries Operating as of June 2013 Brewpubs 1,165 Microbreweries 1,221 Regional Craft Breweries 97 Total US Craft Breweries 2,483 Large Non-Craft…

The merger of Omnicom and Publicis, two giants in the advertising, marketing and corporate communications industry, is raising questions as to if bigger really is…

Apple controls about 40 percent of the United States’ smartphone market and enjoys a 15 percent edge on its next closest competitor – Samsung.  While the…

Competition in the electronic sector may bring about lower tech prices across the board or lead to two different pricing models within the industry. Apple…

The article “Are We in Danger of a Beer Monopoly?” by Adam Davidson of the New York Times discusses the process of a company “building” its own monopoly in a market. Anheuser Busch-InBev (AB InBev) plans on merging with Grupo Modelo (maker of Corona) to increase its pricing power in the US brewing industry. In the past, AB InBev has been such a power that it has set pricing power in a “perfectly competitive” [jargon??] market. AB InBev has said that if competing firms lower prices, then Busch will set their prices lower, starting a price war. With AB InBev having the largest market share of the brewing industry, few firms have the ability to compete with this threat.

I found an article by Venessa Wong in Bloomberg Businessweek entitled “This is What Would Happen If Fast-Food Workers Got Raises.” It helped explain why fast food employees should not be paid their requested wages of $15 an hour – not that the absurdity [see comments – it actually is not absurd!] of this notion needed an extensive explanation. It did, however, raise interesting questions about how a monopoly would react to these demands and how these demands would reflect a firm’s market power.

I came across an article in the New York Times titled, “Tax Increase Proposal Raises Fear of Slowdown in Japan”. In this article, the author describes the two opposing viewpoints of an increase from 5% to 8% sales tax that Prime Minister Shinzo Abe is planning to implement in order to begin working towards diminishing Japan’s massive national debt. The tax is to be distributed evenly throughout all goods and services, in an effort to minimize changes to the recently thriving Japanese economy. Still, economists are worried that the drastic increase in sales tax is too much too soon, and that it will cause Japan to backslide into “the deflationary morass that has dogged it for 15 years” (Tabuchi).

…消費税と研究開発…

Ronald Coase passed away at age 102. While I never met him, my own research at Yale (and Hitotsubashi University and University of Tokyo) was influenced by his thinking about why firms exist and where their boundaries lie. That ultimately resulted in a book Competitive Ties (Columbia University Press, 1991) on automotive parts suppliers in Japan and how assemblers structured transactions.