Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Firm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 17 of 24 … In his book The Wealth of Nations, Adam Smith wrote: "People of the same trade seldom meet together but the conversation ends in a conspiracy against the public or in some diversion to raise prices." The New York Times reported in 1983 the following is an excerpt of a phone conversation between · Robert Crandall, president of American Airlines · Howard Putnam, president of Braniff Airways CRANDALL: I think it's dumb as hell to sit here and pound each other and neither one of us making a dime. PUTNAM: Do you have a suggestion? CRANDALL: Yes. Raise your fares 20 percent, I'll raise mine the next morning. You'll make more money, and I will, too. PUTNAM: We can't talk about pricing! CRANDALL: Howard. We can talk about anything we want to talk about. Putnam was ri
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Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Firm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 16 of 24 … Figure 8 from Chapter 15 here … Restated from Chapter 1, the Ten Principles of Economics: 1: people face trade-offs 2: the cost of something is what you give up to get it 3: rational people think at the margin 4: people respond to incentives 5: trade can make everyone better off 6: markets are usually a good way to organize economic activity 7: governments can sometimes improve market outcomes 8: a country's standard of living depends on its ability to produce goods and services 9: prices rise when the government issues too much money 10: society faces a short-run trade-off between inflation and unemployment … One of the ten principles of economics, #7: governments can sometimes improve market outcomes. Cooperation
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Firm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 15 of 25 … Figure 2 here … In a prisoners’ dilemma situation cooperation is difficult but not impossible. Not all prisoners decide to turn in their partners in crime. Cartels sometimes hold to collusive arrangements, despite the incentive for members to defect. … Players can solve the prisoners' dilemma by playing the game many times. Reconsider the duopolists Jack and Jill, Figure 2. Jack and Jill would like to maintain the cell D monopoly outcome · each produces 30 gallons a week · each gains $1,800 profit a week If Jack and Jill play this game only once neither has incentive to stay with this agreement. Self-interest drives both to renege and choose the dominant 40 gallons strategy, cell A. … Suppose Jack and Jill know they will
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Firm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 14 of 25 … In the game theory prisoners’ dilemma police question two suspects. Lack of cooperation between the suspects is desirable, it results in conviction of more criminals. The prisoners' dilemma is a dilemma for the prisoners, but results in a gain for society … The prisoners' dilemma describes many of life's situations. It shows cooperation can be difficult to maintain even when cooperation would make both players in the game better off. This lack of cooperation is a problem for those involved in these situations. But in some cases, the non-cooperative equilibrium is bad for both the players and society. … In the arms-race game, the United States and the Soviet Union end up at the equilibrium of armed and at mutual risk. In the common-resources game, the cost of the extra well
“At Columbia University in every single class the conclusion was America was founded on the idea of racism, bigotry, and slavery. The only way we can fix it is by tearing down the Constitution and this country and then bring in a socialist paradise on top of it.” Zei know but don't say "correct implementation" of socialism is the way the dictators of North Korea have done zat. https://www.prageru.com/video/yeonmi-park-my-terrifying-escape-from-north-korea?utm_source=Iterable&utm_medium=email&utm_campaign=campaign_3866638
From article Biden’s America-Wrecking Climate Agenda. Steve Milloy. March 12, 2022 President Biden is driving fossil fuel-powered America into a wall so he can replace it with a “green energy”-powered America. The Biden administration euphemizes this as a “transition.” It is not, it’s a collision that will result in America being totaled. Since Joe Biden became president, he has done everything in his power to de-power America . … On Day one, Biden killed the Keystone XL Pipeline, halted new oil and gas drilling on public lands, and rejoined the Paris climate agreement, which commits America to cutting our greenhouse gas emissions but not China’s. Biden’s Environmental Protection Agency -reinstated Obama-era rules to make it more expensive to produce oil and gas -issued rules to make internal combustion engine-powered cars more expensive -gave “green” California the unprecedented (likely unconstitutional) authority to dictate what kind of cars all Americans can dri
What If All Of Us Were Union Members? … First, watch this short video “Do Unions Raise Wages?” https://www.youtube.com/watch?v=S3EUrI63SnA … Per Figure 1 If we all were union members our wages would be 10% higher, point B compared to point A. But overall price level of products we buy would be 20% higher. The 10% difference due to economic inefficiencies, union management salaries, and the amount of union members’ dues union management contribute to union-supporting politicians. It’s better from the viewpoint of unionists that not all of us become union members This is because non-unionists who are paid lower free market value equilibrium wage A have to pay for the unionists’ artificially high wage B through higher prices or taxes … Most economists agree the demand for labor is relatively inelastic, meaning an almost horizontal labor demand curve. With full unionization employment would substantially decrease, from D to C. Total wages paid to all wage earn
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Fi rm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 13 of 25 … Table 2 here … Figure 4 here … Figure 4 and Table 2 - A Common-Resources Game In this game between two firms pumping oil from a common pool the profit each earns depends on both the number of wells it drills and the number of wells drilled by the other firm. … We can consider the problem of overuse of common resources using game theory. In Figure 4 and Table 2, two oil companies, Texaco and Exxon, own adjacent oil fields. A common pool of oil worth $12 million extends under the two fields. Drilling a well to recover the oil costs $1 million. If both Texaco and Exxon drill one well, each will get half of the oil and earn a $5 million profit. If Texaco drills a second well Texaco has two of the three wells. Texaco gets tw
From article John Kerry: Putin’s Useful Climate Idiot. Rupert Darwall. March 03, 2022 Vladimir Putin’s invasion of Ukraine marks the end of the West’s Era of Illusions. It was an era in which Western elites obsessed about solving climate change because the climate crisis was far more dangerous than issues of war and peace and the stability of the international system. They even convinced themselves climate change causes war, so climate change policy could double as national security policy. For many years, the annual round of kumbaya UN climate talks was the apogee of international relations. … In a BBC World Service interview, presidential climate envoy John Kerry expressed concern about the amount of greenhouse gas being emitted from the war in Ukraine. Kerry was just getting warmed up with a string of platitudes that show him as a deluded climate relic, unable to come to terms with the reality Putin has imposed on the world. “Equally importantly,” Kerry complaine
From article Sen. Hagerty: Biden Admin Lit Inflation Fuse. Jack Gournell. March 20, 2022. Sen. Bill Hagerty, R-Tenn., says the Biden administration's $1.9 trillion American Rescue Plan and war on American domestic energy production is to blame for record inflation levels. "The Biden administration on day one launched a war against domestic energy here in America," Hagerty stressed Sunday to "The Cats Roundtable" radio show on WABC 770 AM, hosted by John Catsimatidis. .. "The day Biden came into office he canceled the Keystone pipeline permit and stopped drilling offshore and on federal lands. He basically sent a very clear message to the capital markets this administration was not going to support any sort of investment in the oil and gas industry," Hagerty said. "Global energy prices have increased dramatically," the congressman continued. "And one of the biggest beneficiaries of this is, guess who? Vladimir Putin. Puti
Mostly summarized from Gregory Mankiw’s Principles of Economics, 5 th Ed. PART 5 Firm Behavior and the Organization of Industry Chapter 17 of 36 Oligopoly Section 12 of 25 … Figure 3 here … Figure 3 - An Arms-Race Game In this game between two countries the safety and power of each country depend on both its decision whether to arm or disarm and the decision made by the other country. … The logic of the prisoners' dilemma in which self-interest prevents cooperation and leads to an inferior outcome for the two prisoners applies to many other situations. In the decades after World War II the world's two military superpowers, the U.S. and the Soviet Union (USSR), were in a competition over military power. Consider the decisions of the U.S. and the USSR about whether to build new weapons or to disarm. … Each country prefers to have more arms than the other because a larger arsenal would give it
With Putin gone and under new FSB (KGB) leadership look for Russia to retreat into being a big-prison hermit kingdom like North Korea where at least the "elite" shapeless-form 5% mafia chiefs, with the support of their 48% misery-wuvving negatives, can live in comfort, unless HAT-last their 48% happy-loving positives rise up and force out the KGB and force in a New true democratic, rich, free market country. https://www.ladbible.com/news/intelligence-reveals-russian-security-forces-want-to-assassinate-putin-20220320?fbclid=IwAR2ROkBKNIrJtubCuWuY8NZF_HXjuxCt5TRGBrR7nNMpGEanBG4tjClpUlY