代做Economic Analysis II Question Set 1代写留学生Matlab语言

Economic Analysis II

Question Set 1

Basics, Spinoffs & Corporate Growth

1.    Dunne,  Roberts, and Samuelson found that industries with high entry  rates tended to also have high exit rates. Can you explain this finding? What does this imply for pricing strategies of incumbent firms?

2.    Outline a conceptual model of the spinoff process to explain why intra-industry  spinoffs perform better than other de novo entrants and comparably if not better than diversifying entrants.

3.    Carefully use relevant insights from the theory of spin-offs and the Polya urn model to explain the emergence of industry clusters.

4.    Explore the notion of learning-by-doing using a relevant graph and explain how it could shed lights on the negative relationships observed between firm age and firm size on the one hand and firm growth rate on the other hand.

5.    Reflect on the wide-body aircraft case to explain  how the process of learning-by-doing has historically shaped the industry and led to the dominance of firms such as Boeing. Explain how learning-by-doing can give rise to the first mover advantage, generate strong barriers to entry and help incumbents establish their market position.

6.    Will the process of learning by doing impact network industries differently.

7.    Studies of firm productivity emphasize both within-firm and environmental (structural) drivers of  productivity.  Explain the  mechanisms through which environmental factors drive firm productivity. Ideally, you need to refer to historical evidence to support your answer.

8.    How industry deregulation / trade liberalization leads to productivity or corporate failure?

9.    How will an  increase in international trade likely to affect the concentration of firms in an industry? Would your analysis shed light on the declining number of public firms in advanced economies?

10. Define economies of scale and economies of scope. Explain how these concepts can shed light on the  process of firm growth. Provide real examples to support your analysis. Twitter is currently undergoing restructuring. Using your analysis, carefully predict how far the firm can succeed to extend its horizontal boundaries (the market size the firm serves), and increase its profit.

11.  Imagine you have just been hired by Amazon as a business strategist. Jeff Bezos calls you into his office and asks you to come up with business strategies that secure the position of Amazon’s voice recognition system, called Alexa, in the emerging industry.  Explain  your strategy choices in some detail, using relevant theoretical concepts.

12.  Draw on McDonald’s case to explain how the idea of learning-by-doing is likely to pave the way for replication growth strategy - organization mass production. Will the success of the strategy likely to raise barriers to entry into a market.

13. Identify two demand creation strategies firms used in the past to grow.

14. Google paid $700 million for travel search developer ITA Software in 2011 and has recently started adding to its search engine a few capabilities to compare flight fares, search for cheap flights and plan your journeys. It is also believed that Google is actively developing similar products for the healthcare sector - search for and compare hospitals, legal sector - search for and compare legal fees and insurance industry – search for and compare car insurance. Use relevant economic concepts to shed lights on Google’s growth strategy, and liken the strategy with other firms’ growth strategies. How Google can extend its growth further.

15. Why is there a role for government policies in markets where competition over standards matters? Provide some examples from the history of competition in an industry of your choice.

16. eBay and PayPal are about to break up. Reflect on PayPal’s growth strategy when it merged with eBay. Early in 2013, the activist investor Carl Icahn pressured eBay to divest PayPal and turn it into an independent firm. eBay’s CEO firmly rejected the proposal, emphasising how the two firms complemented each other. After the arrival of iPhone 6 and Apple’s solution to the online identification problem, which has held the online payment market back, eBay’s board of directors have changed its position, confirming that it will divest PayPal, helping it to grow independently. Using relevant economic theories shed light on possible reasons behind eBay’s new move.

17. Hewlett-Packard CEO, Meg Whitman, has recently announced that HP will soon split into two firms – one firm will be focusing on the PC and printer market that is generating HP’s most profits and the other firm will be focusing on the server and corporate IT market that has been struggling over recent years. Meg Whitman has argued that the break-up will give rise to two dynamic  firms  that  can  compete  in  increasingly  tough  markets.  Use  relevant  economic concepts to offer a partial analysis of the pros and cons of such a move (hint: a key concept here is the economies of scale).

Technical Questions

1.    Firm 1 is the incumbent in a market lasting two periods with inverse demand curve P = 74 – 9Q. Its first-period costs are C(q) = 15 + 20q and it faces entry in the second period by Firm 2, which has identical costs.

There is an asymmetry between the firms, however, in that only Firm 1 has the option of investing £63.5 in R&D in the first period in order to reduce its second-period managerial costs to £2 per unit.

a)    Show that it is optimal for Firm 1 to make this investment even though Firm 2 enters regardless.

b)   Show that it would not be optimal for Firm 1 to make the investment if    there   were no threat of entry.

c)    Draw the game tree representing the firms’ strategies to support your results.