In multi-division corporations where division heads are allocated an annual budget, explain why the “use-it-or-lose-it” “use-it-or-lose-it” phenomenon occurs and is a reflection of a prisoner’s dilemma.
Answer to relevant QuestionsIf there is asymmetric information between the owners of a baseball team for which a given player plays and other teams’ owners, would you predict that players who opt to become free agents and end up getting traded to ...Is a repeated-or single-period game more appropriate for the study of oligopolies? In which setting is collusion more likely to be a stable outcome? Explain your answer.Two companies each own property (and mineral rights) in an oil field. Each firm therefore has the legal right to drill for oil on its land and take out as much oil as it can. The problem, of course, is that one company’s ...“College teachers are no more productive today than they were 50 years ago, yet they are paid three times as much today. They are obviously not being paid according to their marginal productivity.” Discuss.What is a monopsony? Graphically, what distinguishes a monopsony from a competitive employer of inputs? What does this difference imply for the relative levels of employment and input prices under monopsony versus ...
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