On leadership

http://www.realcleardefense.com/articles/2015/11/23/what_29_years_in_the_navy_taught_me_about_leadership_108709.html

Older posts on organizational architecture

http://edlikeseconomics.blogspot.com/search/label/Organizational%20Architecture

Amazon has a strategy for its retail business

This article implies that Amazon has build a moat around its competitive advantage and is about to reap the rewards from doing so.

Lock in & the Cloud

http://www.wsj.com/article_email/cloud-computing-promises-fall-short-1447292389-lMyQjAxMTA1NTE0MzAxNzM0Wj

What determines whether or not a doctor prescribes a stent?

Inappropriate Stent Procedures Decline, Study Shows
by: Ron Winslow
Nov 10, 2015
Click here to view the full article on WSJ.com

TOPICS: Health Economics

SUMMARY: A new study suggests cardiologists have curbed overuse of a flagship procedure for treating heart disease that has been cited as a high-profile example of waste in the U.S. health care system.

CLASSROOM APPLICATION: The article offers two interesting economic issues associated with stent implant decisions. First, "upcoding" may explain the reason for the measured reduction, but not an actual reduction, in unnecessary stent implants. The incentive issue is whether doctors are implanting stents for financial gains, despite the possibility that the costs of doing so outweigh the benefits. "But concern arose about a decade ago that many cardiologists were implanting the devices in patients with stable disease and few if any symptoms." Second, "Several studies, including a large trial called Courage, challenged whether the benefits of stents in such patients outweighed the risks and questioned the economic cost to patients and the health system. By some estimates, one in six stent procedures was inappropriate, sparking criticism of cardiologists and prompting calls to rein in use of the devices."

QUESTIONS: 
1. (Introductory) Do physicians have an incentive to overuse certain medical procedures like stent implantation?

2. (Advanced) What is "upcoding"? What is the incentive of a doctor ordering a stent implant on a patient to upcode?

3. (Advanced) How would an economist measure whether upcoding is a response to a change in medical policy or reimbursements for procedures?

Reviewed By: James Dearden, Lehigh University

Strategy in the Internet Economy

Facebook, Amazon and Other Tech Giants Tighten Grip on Internet Economy 
by: Don Clark and Robert McMillan
Nov 06, 2015
Click here to view the full article on WSJ.com

TOPICS: Internet

SUMMARY: Computing hardware has long served as the critical backbone of business operations. Today, the Internet economy is powered by an infrastructure that has become virtual, and is controlled by a small handful of tech giants.

CLASSROOM APPLICATION: Students can evaluate the effect of economies of scale and network externalities (which are not mentioned in the article) on barriers to entry and ultimately the market power of the noted tech companies.

QUESTIONS: 
1. (Introductory) Evaluate this statement in terms of economies of scale and barriers to entry into the relevant industries: "All of these companies are operating in industries where scale is rewarded and where there is a very high level of capital intensity required to even hope to compete," said Karl Keirstead a senior analyst with Deutsche Bank Securities.

2. (Advanced) Evaluate this statement in terms of the market power of tech firms: "These companies are delivering online search, messaging, advertising, applications, computing and storage on demand-which has positioned them not only to empower business but to extract extraordinary value as it grows." Interpret "positioned them" in terms of economies of scale and barriers to entry.

3. (Advanced) Define "natural monopoly" and "network externalities." Do economies of scale and network externalities in the noted tech industries drive barriers to entry and ultimately the market power of the established players in these industries?

Reviewed By: James Dearden, Lehigh University

Loss leaders in the computer hardware markets

The author of this article argues that firms selling computer hardware must focus on capturing market share early in the product life cycle and that doing so requires the firms to sell at a loss in early phase. He argues that decreases in costs will make the product profitable in later phases and that the profit gained then from the market share gained when then produce was a loss leader will more than make up for the early losses.

One question: What keeps price or market share from falling in the later phases?

A prediction market for science

http://qz.com/545682/a-futures-market-could-help-fix-one-of-the-biggest-problems-in-science/

Old posts on asymmetric information

http://edlikeseconomics.blogspot.com/search/label/Asymmetric%20Information

Game Theory in Batman

Batman, Joker robs bank. Is agreeing to kill the “alarm guy” consistent with Nash equilibrium? Saying that the gun was empty when the robber knew it was not? Believing the robber when he said the gun was empty?

Old posts on Game Theory

http://edlikeseconomics.blogspot.com/search/label/Game%20Theory

One way to maintain 3rd degree price discimination - lie to them!

http://consumerist.com/2007/03/02/best-buy-confirms-the-existence-of-its-secret-website/

Want to bet on who wins the Presidential races?

https://www.electionbettingodds.com/

GM trys to curb discounting

This article from the WSJ is a great introduction to pricing, framing, the trade-off between margin and volume, price discrimination, and differentiation.