9781118041581

A

Abbott Laboratories, 15

Accounting profit, 229

Acquisitions, contingent pricing in,

639–640

Additional alternatives, value of,

563–566

Adjusted R-squared, 142–143

Advanced Micro Devices Inc., 325

Adverse selection, 582–585

Advertising, 69, 378–381

Africa, drug prices in, 15–16

Agency cost, 593

Agreements, failed, 653–654

AIDS medications, 15–16, 446–447,

483–484

Air passenger battle, 397–398,

426–428

Airbus, 323, 352, 415, 597–598

Airline deregulation, 467

Airline ticket pricing, 77–78,

108–109, 359–360

Algebraic solutions, linear

programming and, 717

Alternatives, exploration of in

decision making, 9–10

Amazon, 51–52, 236, 254, 352, 375

America Online (AOL), 104, 305

American International Group

(AIG), 591

Apple, 104, 305, 374, 375,

413–414, 596

Assessments, probability, 636

Asymmetric information.

adverse selection and, 582–585

benefits program and, 582–583

building contracts and, 587–588

financial meltdown and,

590–592

health insurance and medical costs

and, 589–590

incentive pay and, 581–582,

616–617

“lemons” market and, 583–585

moral hazard and, 587–588

principal-agent problems and,

587–593, 626–629

signaling and, 585–587

AT&T, 450, 453

Auctions and competitive bidding.

auctions advantages, 670–673

bidder strategies, 674–687

bidding vs.bargaining, 672–673

common values and, 685–687

competitive procurement and,

693–694

cost-plus contracts and, 694

Dutch auctions, 676–677

English auctions, 674–675

equilibrium bidding strategies,

681–685

fixed-price contracts and, 694

Google’s online ads and, 675–676

incentive contracts and, 694

independent private value setting

and, 674

Olympic Games and, 668–669,

694–696

optimal auctions, 687–694

real-life bidding, 691–693

sealed-bid auctions, 677–681, 687

stock repurchases and, 671–672

Vickrey auction, 674–675

winner’s curse and, 686–687

Automobiles

aluminum vs.steel in, 214–215

parts production and, 192

Average-cost pricing, 332–334

Average fixed costs, 242

Average total cost, 239, 240–241

Average variable cost, 239, 242

Azidothymidine (AZT), 446–447,

483–484

B

Baby Bells, 334–336

Bank of America, 591

Bargaining and negotiation. See also

Negotiations

bargaining power, 353

beneficial agreements and,

631–634

competitive strategy and, 416–417

contingent contracts and, 639–640

contingent pricing in an

acquisition, 639–640

failed agreements and, 653–654

multiple-issue negotiations,

640–648

Index

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