9-23-09 - Economics 448 Class Notes He put the powerpoint...

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Economics 448 – Class Notes – 9/23/09 He put the powerpoint slides on his webpage EXAM You don’t need to know the title of the article You just need to know the author’s last name and year What ideas from this class are associated with Coase? What advances in thinking did Coase bring about? Akerlof’s main points? We associate ideas with PEOPLE Associate ideas with PEOPLE (year), not the title of the article Oliver Williamson (1985) – The Economic Institutions of Capitalism * ASSIGNMENT: 9/25/09 Article : Activision – Blizzard Merger PROMPT : What would Williamson think about the way that Blizzard and Activision merged? When reading the article, the section in the Williamson reading read the section where he talks about the idea of selective intervention to answer the question should remind you of this section REQUIREMENTS : 1 and 1 half pages
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TRANSACTION COSTS Authors that talk about these ideas: Coase, Akerlof, Klein, Crawford, and Alchian, and Williamson (a little bit of Hayek too) – search costs 1. Search costs – Coase, Hayek a. Search costs are high when the market is thin b. When it’s hard to find someone to bargain with i. The internet has clearly lowered search costs 2. Bargaining costs - Coase a. When are bargaining costs high? i. When there are multiple parties involved 1. Negotiation costs are high ii. Distance is large 1. When you are closeby, bargaining costs are lower 2. CULTURAL DISTANCE and LANGUAGE BARRIERS a. Hard to communicate with someone of a different culture iii. Asymmetric information 1. When the quality of the product is not known (either to buyer or seller) iv. Market Power 1. Labor unions try to acquire more power more bargaining power
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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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9-23-09 - Economics 448 Class Notes He put the powerpoint...

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