MGT100 Market Selection-1 - Antonia Ferguson David Zhu Lara...

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Antonia Ferguson David Zhu Lara Silversmith Ray Kim MGT 100; Market Selection Apothecary Friedrich Jacob Merck launched Merck in 1668. Ever since then, the pharmaceutical company has risen in ranks from a budding family business to one of the most renounced corporations dominating the American drug Market. Merck has always prided itself on setting the bar: they were the first drug company to subsidize their own research, an act that was frowned at first, but has since become an ubiquitous practice amongst top drug companies today. By the late twentieth century, Merck was on top of the world; not only was it most admired company in Fortune magazine, but Merck, with its string of Nobel laureates, was the hottest place to work for some of medicine’s newest, up-and-coming stars. Through the years, Merck has tallied up an impressive list of drugs to fight anything from AIDs, to cancer, to tuberculosis; but it was Merck’s marketing strategy that truly defined them as the company so many have come to admire and strive to become. For our market selection topic, we have decided to examine Merck’s treatment of asymmetric information, and we want to discuss the ex post exchange problem relating to one of their drugs, Vioxx, which was responsible for the company’s first “hiccup” in the twenty-first century. Today, one of the public’s common conception (or misconception) is their belief in the healing power of drugs; People, especially Americans, engage in risky businesses from consuming high caloric fast foods, to working long hours under the influence of caffeine. Our competitive culture coupled with the fact that the baby boomer generation’s mean age has reached fifty have put a major influence on drug consumption, and giant corporations today cannot wait to satiate our demand. It is in this world of TV
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advertisements and medical soliciting that consumers can easily misconstrue information. Merck, however, has tried to set a higher standard as a supplier by trying to mitigate asymmetric information. In order to mitigate this asymmetric information and more specifically adverse
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This note was uploaded on 04/23/2008 for the course MNG 100 taught by Professor Ahar during the Fall '08 term at Washington University in St. Louis.

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MGT100 Market Selection-1 - Antonia Ferguson David Zhu Lara...

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