PAM 200 10.15 - PAM 200 Theory of the Mine Assume o a fixed...

Info icon This preview shows pages 1–3. Sign up to view the full content.

10/15/07 PAM 200 Theory of the Mine Assume: o a fixed amount of a commodity (oil, good, etc.) o Zero costs of production o Zero storage costs The question is when to sell it o If the objective is to maximize present value of profits (ie maximize profits) (P1Q1)/(1+i)^1 + (P2Q2)/(1+i)^2 + (P3Q3)/(1+i)^3 If Pn/(1+i)^n > Pm/(1+i)^m then we would not sell in year M but might sell in year N Moore’s law, processing power of computers doubles every 18 months Team Production
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: • Assume: o A group of Q identical team members o They agree to product and share their output equally (ex. communism, sales teams, group projects, families, shareholders, etc.) Principle – Agent Problems • An owner decides how much profit versus amenities • How does the new owner induce the CEO to increase profits? o Production bonuses o Equity (stock options) o Reduce short term behavior o Induce overly risky behavior...
View Full Document

  • Fall '07
  • EVANS,T.
  • 18 months, N Moore

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern