Managerial Economics

Cover
Half Title
Endorsement
Title Page
Copyright Page
Dedication
Table of Contents
Preface
Acknowledgments
About the Author
Chapter 1 Introduction to Managerial Economics
	1.1 What Is Managerial Economics?
	1.2 Value Added
	1.3 Decision-Making
	1.4 Bounded Rationality
		Sunk-cost Fallacy
		Status Quo Bias
		Anchoring
	1.5 Organization
		Organizational Boundaries
		Outsourcing
	1.6 Markets
		Competitive Markets
		Market Power
		Imperfect Markets
	Sources
Part I Competitive Markets
	Chapter 2 Demand
		2.1 Introduction
		2.2 Individual Demand
			Construction
			Marginal Benefit
			Preferences
		2.3 Demand and Income
			Income Changes
			Normal and Inferior Products
		2.4 Other Factors in Demand
			Complements and Substitutes
			Advertising
			Business Demand
		2.5 Buyer Surplus
			Benefit
			Benefit and Expenditure
			Price Changes
			Package Deals and Two-Part Pricing
		2.6 Market Demand
		Market Demand Curve: Construction
		Sources
	Chapter 3 Elasticity
		3.1 Introduction
		3.2 Own-Price Elasticity
			Estimation
			Properties
			Accuracy
			Elastic/inelastic Demand
		3.3 Forecasting
			Quantity Demanded
			Expenditure
			Pricing Strategy
		3.4 Behavioral Factors
			Benefits/costs of Economizing
			Availability of Substitutes
			Buyer’s Prior Commitments
			Adjustment Time
			Sunk-cost Fallacy
			Anchoring
		3.5 Other Elasticities
			Income Elasticity
			Cross-price Elasticity
			Advertising Elasticity
			Forecasting Multiple Factors
		Sources
	Chapter 4 Supply
		4.1 Introduction
		4.2 Short-Run Costs
			Fixed and Variable Costs
			Marginal Cost
			Average Cost
			Production Technology
		4.3 Short-Run Individual Supply
			Production Rate
			Break-even Analysis
			Individual Supply Curve
		4.4 Long-Run Individual Supply
			Long-run Costs
			Production Rate
			Break-even Analysis
			Individual Supply Curve
		4.5 Market Supply
			Short and Long Run
			Properties
		4.6 Elasticity of Supply
			Price Elasticity
			Intuitive Factors
				Available Production Capacity
				Adjustment Time
		4.7 Seller Surplus
		Market Supply Curve: Construction
		Short Run
		Long Run
		Sources
	Chapter 5 Market Equilibrium
		5.1 Introduction
		5.2 Perfect Competition
		5.3 Market Equilibrium
			Demand and Supply
			Excess Supply
			Excess Demand
		5.4 Demand Shift
			Equilibrium Change
			Price Elasticity of Supply
			Price Elasticity of Demand
		5.5 Supply Shift
		5.6 Intermediation
			Buyer’s Price and Seller’s Price
			Incidence
		5.7 Invisible Hand
			Economic Efficiency
			Two Roles of Prices
			Distortion
		Sources
Part II Market Power
	Chapter 6 Costs
		6.1 Introduction
		6.2 Economic Cost
		6.3 Opportunity Cost
			Alternative Courses of Action
			Identifying Opportunity Cost
			Decision-making
		6.4 Sunk Costs
			Alternative Courses of Action
			Identifying Sunk Costs
			Decision-making
			Strategic Implications
		6.5 Economies of Scale
			Fixed and Variable Costs
			Marginal and Average Costs
			Diseconomies of Scale
			Strategic Implications
			Sunk and Fixed Costs
		6.6 Economies of Scope
			Joint Cost
			Strategic Implications
			Diseconomies of Scope
		6.7 Bounded Rationality
			Status Quo Bias
			Sunk-cost Fallacy
			Fixed-cost Fallacy
		Sources
	Chapter 7 Monopoly
		7.1 Introduction
		7.2 Sources of Market Power
			Product Differentiation
			Intellectual Property
			Economies of Scale and Scope
			Regulation
		7.3 Profit Maximum
			Revenue
			Costs
			Profit-maximizing Rate
			Break-even Analysis
			Profit Measures
		7.4 Demand and Cost Changes
			Demand Change
			Marginal Cost Change
			Fixed-cost Change
		7.5 Advertising
			Profit-maximizing Advertising
			Advertising–sales Ratio
		7.6 Research and Development
		7.7 Market Structure
		7.8 Monopsony
			Benefit and Expenditure
			Maximizing Net Benefit
		Sources
	Chapter 8 Pricing
		8.1 Introduction
		8.2 Uniform Pricing
			Price Elasticity
			Profit-maximizing Price
			Demand and Cost Changes
			Common Misconceptions
		8.3 Complete Price Discrimination
			Shortcomings of Uniform Pricing
			Price Discrimination
			Economic Efficiency
			Information and Resale
		8.4 Direct Segment Discrimination
			Homogeneous Segments
			Heterogeneous Segments
			Implementation
		8.5 Indirect Segment Discrimination
			Structured Choice
			Implementation
		8.6 Selecting the Pricing Policy
			Technology
			Cannibalization
		Sources
	Chapter 9 Strategic Thinking
		9.1 Introduction
		9.2 Nash Equilibrium
			Definition
			Solving Equilibrium – Formal Method
			Solving Equilibrium – Informal Method
			Non-equilibrium Strategies
		9.3 Randomized Strategies
			Nash Equilibrium in Randomized Strategies
			Why Randomize?
		9.4 Competition Or Coordination
		9.5 Sequencing
			Backward Induction
			Equilibrium Strategy
			First-mover Advantage
		9.6 Strategic Move
		9.7 Conditional Strategic Move
			Promise
			Threat
		Solving Nash Equilibrium in Randomized Strategies
		Graphical Solution
		Algebraic Solution
		Note
		Sources
Part III Imperfect Markets
	Chapter 10 Externalities
		10.1 Introduction
		10.2 Positive Externality
			Individual Maximum
			Joint Maximum
		10.3 Negative Externality
		10.4 Benchmark
			Common Ownership
			Agreement
			Assignment of Rights
			Free-riding
		10.5 Network Effects and Externalities
			Critical Mass
			Expectations
			Tipping
			Price Elasticity
		10.6 Public Goods
			Rivalness
			Benchmark: Economic Efficiency
		10.7 Excludability
			Content and Delivery
			Law
			Technology
		Sources
	Chapter 11 Asymmetric Information
		11.1 Introduction
		11.2 Imperfect Information
			Imperfect and Asymmetric Information
			Risk
			Risk Aversion
		11.3 Adverse Selection
			Demand and Supply
			Market Equilibrium
			Economic Inefficiency
			Market Failure
		11.4 Appraisal
		11.5 Screening
			Self-selection
			Differentiating Variables
		11.6 Signaling
		11.7 Contingent Contracts
		Sources
	Chapter 12 Incentives and Organization
		12.1 Introduction
		12.2 Moral Hazard
			Asymmetric Information About Actions
			Economic Inefficiency
			Degree of Moral Hazard
		12.3 Monitoring and Incentives
			Monitoring
			Incentives
			Risk
		12.4 Holdup
			Specific Investments
			Incomplete Contracts
		12.5 Ownership
			Residual Income
			Vertical Integration
		12.6 Organizational Architecture
			Holdup
			Moral Hazard
			Internal Market Power
			Economies of Scale and Scope
			Balance
		Sources
	Chapter 13 Regulation
		13.1 Introduction
		13.2 Natural Monopoly
			Government Ownership
			Price Regulation
			Rate-of-return Regulation
		13.3 Potentially Competitive Market
			Competition Law
			Conduct Regulation
			Structural Regulation
		13.4 Asymmetric Information
			Disclosure
			Conduct Regulation
			Structural Regulation
		13.5 Externalities
			User Fee/tax
			Quota/standard
		13.6 Global Externalities
			Multilateral Regulation
			Information and Biases
		13.7 Contingent Externalities
		Sources
Index