| Preface: Teaching Students to Solve Problems |
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SECTION I Problem Solving and Decision Making |
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1 | (64) |
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Introduction: What this Book is About |
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2 | (8) |
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2 | (2) |
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4 | (2) |
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Economics in Job Interviews |
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6 | (2) |
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Summary & Homework Problems |
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8 | (2) |
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The One Lesson of Business |
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10 | (13) |
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11 | (2) |
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Do Mergers Move Assets To Higher-Valued Uses? |
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13 | (1) |
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Does the Government Create Wealth? |
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14 | (1) |
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Economics versus Business |
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15 | (4) |
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Wealth Creation in Organizations |
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19 | (1) |
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Summary & Homework Problems |
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20 | (3) |
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Benefits, Costs, and Decisions |
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23 | (17) |
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Background: Variable, Fixed, and Total Costs |
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23 | (2) |
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Background: Accounting versus Economic Profit |
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25 | (2) |
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Costs Are What You Give Up |
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27 | (1) |
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Fixed- or Sunk-Cost Fallacy |
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28 | (2) |
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30 | (1) |
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31 | (1) |
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32 | (1) |
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Psychological Biases and Decision Making |
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33 | (2) |
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Summary & Homework Problems |
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35 | (5) |
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Extent (How Much) Decisions |
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40 | (11) |
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Background: Average and Marginal Costs |
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41 | (1) |
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42 | (3) |
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45 | (1) |
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Tie Pay to Performance Measures that Reflect Effort |
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46 | (1) |
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If Incentive Pay Is So Good, Why Don't More Companies Use it? |
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47 | (1) |
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Summary & Homework Problems |
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48 | (3) |
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Investment Decisions: Look Ahead and Reason Back |
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51 | (14) |
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How to Determine Whether Investments Are Profitable |
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51 | (2) |
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53 | (2) |
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Choosing the Right Manufacturing Technology |
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55 | (1) |
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Shutdown Decisions and Break-Even Prices |
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56 | (1) |
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Sunk Costs and Post-Investment Hold-Up |
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57 | (2) |
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Solutions to the Hold-Up Problem |
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59 | (1) |
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Summary & Homework Problems |
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60 | (5) |
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SECTION II Pricing, Costs, and Profits |
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65 | (86) |
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66 | (16) |
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Background: Consumer Surplus and Demand Curves |
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67 | (2) |
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Marginal Analysis of Pricing |
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69 | (2) |
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Price Elasticity and Marginal Revenue |
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71 | (3) |
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What Makes Demand More Elastic? |
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74 | (2) |
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Forecasting Demand Using Elasticity |
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76 | (1) |
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Stay-Even Analysis, Pricing, and Elasticity |
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77 | (1) |
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Summary & Homework Problems |
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78 | (4) |
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Economies of Scale and Scope |
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82 | (12) |
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83 | (2) |
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85 | (1) |
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86 | (2) |
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88 | (1) |
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89 | (1) |
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Summary & Homework Problems |
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90 | (4) |
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Understanding Markets and Industry Changes |
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94 | (21) |
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Which Industry or Market? |
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94 | (1) |
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95 | (2) |
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97 | (1) |
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98 | (1) |
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Predicting Industry Changes Using Supply and Demand |
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99 | (3) |
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Explaining Industry Changes Using Supply and Demand |
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102 | (3) |
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Prices Convey Valuable Information |
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105 | (2) |
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107 | (3) |
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Summary & Homework Problems |
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110 | (5) |
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Relationships Between Industries: The Forces Moving us Towards Long-Run Equilibrium |
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115 | (10) |
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116 | (2) |
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The Indifference Principle |
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118 | (4) |
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122 | (1) |
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Summary & Homework Problems |
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123 | (2) |
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Strategy---the Quest to Keep Profit from Eroding |
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125 | (12) |
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126 | (1) |
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Sources of Economic Profit |
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127 | (5) |
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The Three Basic Strategies |
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132 | (2) |
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Summary & Homework Problems |
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134 | (3) |
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Using Supply and Demand: Foreign Exchange, Trade, and Bubbles |
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137 | (14) |
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The Market for Foreign Exchange |
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138 | (2) |
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140 | (1) |
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The Effects of a Currency Devaluation |
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141 | (2) |
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Bubbles: Past Performance Is No Guarantee of Future Success |
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143 | (4) |
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Summary & Homework Problems |
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147 | (4) |
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SECTION III Pricing for Greater Profit |
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151 | (32) |
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More Realistic and Complex Pricing |
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152 | (11) |
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Pricing Commonly Owned Products |
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153 | (2) |
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Revenue or Yield Management |
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155 | (2) |
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Advertising and Promotional Pricing |
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157 | (1) |
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158 | (1) |
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Summary & Homework Problems |
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159 | (4) |
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Direct Price Discrimination |
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163 | (9) |
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163 | (1) |
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Why (Price) Discriminate? |
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164 | (3) |
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Direct Price Discrimination |
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167 | (1) |
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168 | (1) |
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Implementing Price Discrimination Schemes |
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169 | (1) |
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170 | (1) |
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Summary & Homework Problems |
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170 | (2) |
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Indirect Price Discrimination |
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172 | (11) |
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Indirect Price Discrimination |
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174 | (2) |
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Volume Discounts as Discrimination |
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176 | (2) |
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Bundling Different Goods Together |
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178 | (1) |
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Summary & Homework Problems |
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179 | (4) |
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SECTION IV Strategic Decision Making |
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183 | (36) |
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184 | (23) |
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185 | (3) |
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188 | (6) |
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What Can I Learn from Studying Games Like the Prisoners' Dilemma? |
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194 | (2) |
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196 | (5) |
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Summary & Homework Problems |
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201 | (6) |
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207 | (12) |
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Bargaining as a Game of Chicken |
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208 | (2) |
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How to Improve Your Bargaining Position |
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210 | (4) |
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Summary & Homework Problems |
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214 | (5) |
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219 | (48) |
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Making Decisions with Uncertainty |
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220 | (13) |
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220 | (4) |
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224 | (2) |
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Run Natural Experiments to Reduce Uncertainty |
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226 | (1) |
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Minimizing Expected Error Costs |
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227 | (1) |
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228 | (1) |
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Summary & Homework Problems |
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229 | (4) |
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233 | (11) |
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234 | (1) |
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235 | (1) |
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236 | (1) |
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237 | (2) |
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239 | (1) |
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Summary & Homework Problems |
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240 | (4) |
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The Problem of Adverse Selection |
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244 | (11) |
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244 | (1) |
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Anticipating Adverse Selection |
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245 | (2) |
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247 | (3) |
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250 | (1) |
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Adverse Selection and Internet Sales |
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251 | (1) |
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Summary & Homework Problems |
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252 | (3) |
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The Problem of Moral Hazard |
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255 | (12) |
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256 | (1) |
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Moral Hazard versus Adverse Selection |
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257 | (1) |
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258 | (2) |
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260 | (1) |
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Moral Hazard and the 2008 Financial Crisis |
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261 | (1) |
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Summary & Homework Problems |
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262 | (5) |
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SECTION VI Organizational Design |
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267 | (40) |
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Getting Employees to Work in the Firm's Best Interests |
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268 | (13) |
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Principal-Agent Relationships |
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268 | (2) |
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Principles for Controlling Incentive Conflict |
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270 | (2) |
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272 | (1) |
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273 | (1) |
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A Framework for Diagnosing and Solving Problems |
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274 | (3) |
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Summary & Homework Problems |
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277 | (4) |
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Getting Divisions to Work in the Firm's Best Interests |
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281 | (14) |
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Incentive Conflict between Divisions |
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281 | (2) |
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283 | (2) |
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Functional Silos versus Process Teams |
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285 | (2) |
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Budget Games: Paying People to Lie |
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287 | (3) |
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Summary & Homework Problems |
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290 | (5) |
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Managing Vertical Relationships |
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295 | (12) |
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Do Not Buy a Customer or Supplier Simply Because They Are Profitable |
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296 | (1) |
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Evading Regulation, Bundling, Tying, and Exclusion |
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297 | (1) |
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Eliminating the Double Markup |
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298 | (1) |
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Aligning Retailer Incentives with the Goals of Manufacturers |
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299 | (2) |
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301 | (1) |
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302 | (1) |
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Summary & Homework Problems |
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303 | (4) |
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307 | (10) |
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308 | (9) |
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Excess Inventory of Prosthetic Heart Valves |
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308 | (1) |
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High Transportation Costs at a Coal-Burning Utility |
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309 | (1) |
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Overpaying for Acquired Hospitals |
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310 | (2) |
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Large E&O Claims at an Insurance Company |
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312 | (2) |
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Losing Money on Homeowner's Insurance |
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314 | (1) |
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Quantity Discounts on Hip Replacements |
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315 | (1) |
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What You Should Have Learned |
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316 | (1) |
| Epilogue: Can Those Who Teach, Do? |
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317 | (2) |
| Glossary |
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319 | (6) |
| Index |
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325 | |
