9-21-09 - Economics 448 Class Notes 9/21/09 Apply to the...

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Economics 448 – Class Notes – 9/21/09 Apply to the Simon Early Leader’s Competition Main idea in Klein, Crawford, and Alchian : Appropriable quasi-rent Appropriable quasi-rent : The (value of an asset in its current) – (the value of the asset in its next best use) Allegheny College used for educational purposes. o Next best use: turn it into a low security prison The difference in value is the appropriable quasi-rent Alaska Packers’ Association – Fish example Domenico workers Alaska packer’s Association owner of the ship and cannery There was an original contract for $50 per worker + $0.02 per fish The workers brought a lawsuit against Alaska Packers’ Association and won Now the Alaska Packers’ Association is appealing the lawsuit (in the article) Original contract was signed in San Francisco IMPORTANT * Workers to be paid: $50 per worker + $0.02 per fish Then they all go to Alaska (Pyramid Harbor) to work It’s important that we know the location has changed the new location is really remote; o You cannot hire replacement workers in Alaska, so the company is stuck with the workers NEW CONTRACT : May 22 nd - $100 for season + $0.02 per fish renegotiated with the
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This note was uploaded on 01/07/2010 for the course ECON 448 taught by Professor Nonnenmacher during the Fall '07 term at Allegheny.

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9-21-09 - Economics 448 Class Notes 9/21/09 Apply to the...

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