...Matching Markets & Auctions Bence Gábor Microeconomics BBCI 2015 (Summer Semester) Instructor: Prof. (FH) Mag. Dr. Ferry Stocker Table of Contents Table of Contents 2 Introduction 3 Matching Markets 3 Finding the best match 3 Auctions 4 Auction formats: 4 Private values vs Common values: 5 Bidding strategies: 5 Glossary 6 Bibliography 7 Books: 7 Websites: 7 Graphs: 7 Introduction The aim of this report is to introduce matching markets and auctions in microeconomic level. These two might sound unfamiliar to many people, although they appear in our life almost on daily basis, we just do not usually recognize them. Matching Markets Markets can be thought as a prime example of network structured interaction between people (usually sellers and buyers) who interact with each other. A few of the basic examples of matchmaking from everyday life are marriage, applicants and colleges, students and dormitory rooms, students and universities, doctors and hospitals, and so on. Of course normally there are some constrains, otherwise there would be no need for any kind of market. For instance an organ donor’s blood type must be compatible with the patient’s, or a student has some expectations toward the available dormitories. Finding the best match The procedure of finding the best match is relatively easy when only one side of the market has preferences over its matches, like in the mentioned student-dorm example. In that case each student apply...
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...Regular Assignment 1 Module: The Business Environment Tutor: Steve Tidball Submission Date: 19th September 2013 Confidentiality: I have read, understand and adhere to the KOL Confidentiality Policy. Click here to access the KOL Confidentiality Policy. Academic Integrity Statement: I have read and understood the Academic Integrity guidelines for Kaplan Open Learning and the University Of Essex, and declare that this assignment conforms to all of the rules and regulations contained therein. Please note: the guidelines can be found in the Student Handbook (see section 6.4). Regular assignment one Introduction In this assignment, the explanation of the macroeconomic and microeconomic environment will be happen with the aid of examples. Once this has been completed, a critical analysis of how the economic environment in recent years has affected Hampshire fire and rescue service will be made. Main Body The Macroeconomic environment The Macroeconomic environment is an examination of the economy. The macroeconomic environment is an important one because the analysis compiled enables a business to investigate an economy and see what trends are occurring. For instance, if the economy has grown since the last analysis or shrunk. The difference between the increase and decrease of the economy is important because the retailer has no control over how the economy grows or shrinks. There are also certain influences which will affect the macroeconomics; these are...
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...the wealth arguments in the aggregate demand function. We can thus state the monopolist’s problem as follows: max pq (p) − c (q (p)) . p Note, however, that there is a one-to-one correspondence between the price charged and the quantity the monopolist sells. Thus we can rewrite the problem in terms of quantity sold instead of the price charged. Let p (q) be the inverse demand function. That is, p (q (p)) = p. The firm’s profit maximization problem can then be written as max p (q) q − c (q) . q It turns out that it is usually easier to look at the problem in terms of setting quantity and letting price be determined by the market. For this reason, we will use the quantity-setting approach. 1 References: Tirole, Chapter 1; MWG, Chapter 12; Bulow, “Durable-Goods Monopolists,” JPE 90(2) 314-332. 233 Nolan Miller Notes on Microeconomic Theory: Chapter 9 P ver: Aug. 2006 P0 A B D Q0 Q Figure 9.1: The Monopolist’s Marginal Revenue In order for the solution to be unique, we need the objective function to be strictly concave (i.e. d2 π dq2 < 0). The second derivative of profit with respect to q is given by d2 (p (q) q − c (q)) = p00 (q) q + 2p0 (q) − c00 (q) . dq 2 If cost...
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...ECON 203 - Case Study case study I. Table of Contents I. Table of Contents ……………………………………………… 1 II. Summary of Article ……………………………………………… 2 III. Concepts from Microeconomics Applied to Article …………. 4 A) Monopolies vs. Perfect Competition…………………… 4 B) Natural Monopolies……………………………………… 4 C) Price Discrimination……………………………………… 5 D) Price Controls for a Natural Monopoly……………… 5 E) Picking an Output Level………………………………. 6 IV. Analysis of Paper ……………………………………………….. . 7 V. Works Cited ………………………………………………………. 8 II. Summary of Article In a recent article written by Chris Moran titled “Why New Fiber Networks are Required to Shatter Monopolies of Comcast and Other ISPs” (Moran, 2013), the author commiserates with consumer’s financial frustrations that are stemming from monopolistic cable companies. Moran explains that the cable monopolies have come to exist as a result of outdated regulations that force a certain company upon a consumer based on their zip code. The article proclaims that with the introduction of fiber-optic networks, these monopolies may finally shatter. Moran’s article correspondingly references an editorial that was written by Christopher Lee, published in the Washington Post, which focuses on how cable companies are able to maximize their profits (Lee, 2013). Moran’s article highlights Lee’s core argument, which is that cable providers are engaging in price discrimination. Basically, by offering...
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...economics that deals with the idea of relevance to the contemporary business, in order to improve a complete understanding of the supply distribution matters opposite the business organisation and the environment that it functions in. It uses various economic theory and other quantitative methods to scrutinise a business organisation and the issues that influences the enterprise with the labour and its market. Question 1 Business Economics is a useful toolbox for understanding the business environment and making better decisions. Consider you are the managing director of a manufacturing company based in UK; describe the different aspects of the business that you should be looking at from an economics perspective in order to run the company efficiently. Consider both the microeconomics and macroeconomics perspectives. The entire business organisations around the globe have one similar goal and that is to increase the profit. By scrutinising the demand of the clients, supplying good quality and suitable supply, the profit can be maximised. Conversely there are various microeconomic and macroeconomic factors that affect this process. These factors significantly affect the sales and production level of a business organisation1. The following are few of the economic factors that affect the efficiency of a business organisation. All these factors are interconnected to each other. * Demand and supply: Two of the main factors that affect the efficiency of an organisation are demand...
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...of the latest iPad. Apple had advertised on there website as an iPad with WIFI+ 4G capabilities, the tablet is unable to use the 1800MHz frequency which is Australia’s existing 4G network. The ACCC is a part of government that aims to encourage competition in a stable environment and to look after the consumer so the consumers do not believe that they are being taken advantaged of by the misleading claims. This misleading claims or a consumer being feeling cheated allows the Australian Competition Consumer Competition to intervene in behalf for the consumer. ACCC had to intervene in behalf of the consumer when apple had made misleading statements about their latest product the iPad. Australian Competition and Consumer Commission believed that apple had made misleading statements about their connectivity speed of the iPad. The basis for this intervention is to maintain or enforce competition within Australia and by the misleading claims the company apple was misleading the consumer by the reference to 4G capabilities. To maintain or even enforce competition ACCC has to intervene to allow the consumer the choice of choosing the product and to have the information about the product before making a decision on the product to purchase. ACCC intervenes to monitor or foster competition so no single market participant has enough influence to determine the going price for the good or service. In Apple’s case the misleading information can have a bearing on their decision on the product...
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...5Frederick E. Webster, Jr. The Changing Role of Marketing in the Corporation New organization forms, including strategic partnerships and networks, are replacing sinnple market-based transactions and traditional bureaucratic hierarchical organizations. The historical marketing management function, based on the microeconomic maximization paradigm, must be critically examined for its relevance to marketing theory and practice in the 1990s. A new conception of marketing will focus on managing strategic partnerships and positioning the firm between vendors and customers in the value chain with the aim of delivering superior value to customers. Customer relationships will be seen as the key strategic resource of the business. .^ ., OR the past two decades, some subtle changes in the concept and practice of marketing have been fundamentally reshaping the field. Many of these changes have been initiated by industry, in the form of new organizational types, without explicit concern for their underlying theoretical explanation or justification. On the academic side, prophetic voices have been speaking (Amdt 1979, 1981, 1983; Thorelli 1986; Van de Ven 1976; Williamson 1975) but seldom heard because, representing several different disciplines, they did not sing as a chorus. More basically, perhaps, few listeners were ready to hear the message or to do the intellectual work necessary to pull the several themes together. Like the Peruvian Indians who thought the sails of Ihe Spanish...
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...General Concepts 1. What is Economics Economics is the study the production and distribution of goods and services, it is the study of human efforts to satisfy unlimited wants with limited resources. Thus dealing wiht the econimy these are the questions all nations must ask when dealing with scarcity and effcientlly allocating their resources :what to produce? How to produce? For whom to produce ? 2. What is Micro and Macro Economics Micro economy studies how individuals and firms allocate these scarce resources to produce and distribute goods and services.Micro economics is the study of the different parts of the economy. Studying micro economics we are studying the individual sectors of the economy and how they operate. In macroeconomics, on the other hand, we look at the functioning of the economy as a whole,the study of the major economic 3. Factors of production and their prices. Factors of production are those elements that a nations has at its disposal to deal with the issue of scarcity. How efficiently these are used determines the measure of success a nation has. They are land, capital, labor and entrepreneurs Macroeconomics Concepts 4. Growth Models Economic growth is a positive circumstance for any nation. It raises the standard of living, cuts down on government responsibilities, and alleviates many of the ills of society. Its aspects are :standard of living, the ability of the standard of living to increase people's free time, domestic problems, the...
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...themselves for attack (Handy 1990), marketers may ignore some important information in their environment simply because it is not consistent with their past experience. The purpose of this article is to outline both the intellectual and the pragmatic roots of changes that are occurring in marketing, especially marketing management, as a body of knowledge, theory, and practice and to suggest the need for a new paradigm of the marketing function within the firm. First, the origins of the marketing management framework, the generally accepted paradigm of the marketing discipline for the past three decades, are considered. Then shifting managerial practice is examined, especially the dissolution of hierarchical bureaucratic structures in favor of networks of buyer-seller relationships and strategic alliances. Within those new forms of organization, the changing role of marketing is discussed and a reconceptualization of marketing as a field of study and...
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...effective—even efficient—to establish computer help centers in Bombay to service customers in Boston, or to hire programmers in Buenos Aires to make websites for companies in Stockholm 2. both the government and the Fed have taken proactive roles to mitigate this economic contraction. The overarching goal is controlled, sustained growth, and both fiscal and monetary policy can help achieve this objective. 3. microeconomics. Macroeconomics is the study of a country's overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies. While macroeconomic issues may seem abstract, they directly affect your day-to-day life, influencing key variables such as what jobs will be available for you, how much cash you'll actually take home after taxes, or how much you can buy with that cash in any given month. Microeconomics focuses on smaller economic units such as individual consumers, families, and individual businesses. Both macroeconomics and microeconomics have played an integral role in the global economic crisis. 4. While the free market drives performance in the American economy, the federal government and the Federal Reserve can help shape performance. During the recent crisis, both the government and the Fed have taken proactive roles to mitigate this economic contraction. The overarching goal is controlled, sustained growth, and both fiscal and monetary policy can help achieve this objective. 5. The fundamental elements are rights to...
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...practice to achieve a much productive service of health care for Americans. The article, “How to bring the Price of Health Care into the Open” written by Melinda Beck published in the Wall Street Journal on February 23 of present year, addresses many substantial topics and ideas of our former health care system. Her main points are to inform, educate, and alert consumers in advance about health care pricing. The ways she delivers her points are by talking about how to bring the price of health care into the open, price transparency, the disparity between list prices and the aid from insurance providers. Before going into clear description of Becks article one must set a foundation by defining Microeconomics and how the article relates to it. As defined by Krugman he writes, “Microeconomics is the branch of economics that studies how people make decisions and how these...
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...INTRODUCTION 1 BACKGROUND Nowadays, telecommunication plays an important role in the worldwide connection, which leads to the new era of information technology. Having been used for the first time among militaries, wireless communication is now experiencing a mushroom increase in both quantity demanded and supplied. However, the situation of each service company seems not to be fit the general trend because their numbers of subscribers fluctuate widely. The purpose of this research is to find out the causes of the kinks between general movement and individuals’ trends. In fact, a telecommunication company or a communication service company is an enterprise that provides many kinds of services such as telephone, GPRS, Internet connection, etc. Some company belongs to government corporations such as Viettel while others are business like AT&T (American corporation) and Telekomunikasi Selular (Indonesian company). These service enterprises earn huge revenues each year which can be pointed out: Viettel corporation revenue is $4.15 billion while AT&Ts is about $15.6 billion. They are huge amounts of money composing to profits so every-company tries to maximize them by increasing the numbers of subscribers, which one way is using promotion plans. General information about promotion strategies can be found easily. Some marketing book have deeply view on this method. In term of marketing, Promotion is “one of the four elements of marketing mix (product...
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...through the concept of perfect competition versus monopolies. Secondly, I shall state a range of empirical evidence drawn from various sources negating the Neo-Classical interpretation, from which it shall become clear in what situations the Neo-Classical model fails. Lastly, I shall outline a game theory explanation of the typical case where monopoly invariably outperforms competition. The Neo-Classical Economic Interpretation According to this interpretation, social welfare (in the sense of maximising allocative efficiency1) is maximised only under perfect competition where infinitely tiny (relative to all other competing) firms are price takers2. In contrast, monopolies, whom are price setters through their ability to affect their market, create a deadweight loss to society as output is lower than is socially optimal3. This model is summarised by the top graph in Figure 1 below where Pm and Qm are aggregate equilibrium price & quantity for monopolies and Ppc and Qpc are for perfectly competitive firms. The graph on the bottom is that for a single perfectly competitive firm, with its straight line fixed price. 1 By ‘allocative efficiency’ I mean reaching a Pareto Efficient Optimum whereby any further change would make the aggregate of consumers and firms (ie; society) worse off according to the model. 2 3 Where Price = Marginal Cost = Marginal Revenue and thus no economic profit is made in equilibrium. Where Price >= (Marginal Cost = Marginal Revenue) and...
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...can be sold or charge prices within demand? No matter the choice taken, ownership will always belong to the monopolist. According to Roger A. Arnold, a monopoly is a market structure in which there is a single supplier of a good or service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes. Monopolies form when there is no competition between a leading firm and other companies, which allows the leading company to charge unreasonable high prices. Although monopolies are forbidden, since the U.S. government first outlawed monopolies in the 1890s, there are companies to this day that still have control over virtual monopolies in their firms. A journalist, who wrote the ‘3 Companies That Have Monopolies In The United States’ article, explains that monopoly owned companies dominate their respective markets and have no significant competitor. For instance, should ESPN be allowed to have their monopolized network for all things sports? In order to retain a monopoly, the ESPN company must prove the theory of monopoly, monopoly pricing, and output decisions by taking over the sports market. Sport marketing is a sector of marketing, which emphases both the promotion of sports’ events and teams along with the promotion of sports’ products and services. The sports market contains a distribution service, in which the component promoted can be a physical product or a brand name. The mission of sport marketing is to provide the client with...
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...GE117 Composition I | A 4 credit hour Composition course This course covers phases of the writing process, with special emphasis on the structure of writing and techniques for writing clearly, precisely and persuasively. Prerequisite or Corequisite: TB133 Strategies for the Technical Professional or equivalent GE127 College Mathematics I | A 4 credit hour Mathematics course This course will include, but is not limited to, the following concepts: quadratic, polynomial and radical equations, linear functions and their graphs, systems of linear equations, functions and their properties and triangles and trigonometric functions. Activities will include solving problems and using appropriate technological tools. Prerequisite: GE184 Problem Solving or TB184 Problem Solving or GE150 Survey of the Sciences or equivalent; Prerequisite or Corequisite: TB133 Strategies for the Technical Professional or equivalent GE184 Problem Solving | A 4 credit hour Science course This course introduces students to problem solving techniques and helps them apply the tools of critical reading, analytical thinking and mathematics to help solve problems in practical applications. GE192 College Mathematics II | A 4 credit hour Mathematics course This course will include, but is not limited to, the following concepts: exponential and logarithmic equations and functions, graphs of trigonometric functions, trigonometric equations, polar coordinates, oblique triangles, vectors and sequences. Prerequisite:...
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