Bargaining and negotiation (continued)
negotiation strategy, 648–656
patent conflict and, 635–636
probability assessments and, 636
resolving disputes and, 634–636
risk aversion and, 637–639
Sanofi’s bid for Genzyme, 630–631,
656–657
selling a warehouse and, 631–634
settlement negotiations, 637
Texaco vs.Pennzoil lawsuit,
654–656
value differences and, 636–639
Barnes & Noble, 3, 10, 352, 375, 414
Barometric models, 162–163
Barriers to entry, 320, 322–324
capital requirements and, 323
economies of scale and, 322–323
legal barriers, 324
product differentiation and, 323
pure quality and cost advantages
and, 323
resources control and, 323–324
strategic barriers and, 324
Baseball, winning in, 201–202
Bayes’ theorem, 548–550
Bazerman, Max, 517
Bear Stearns, 591
Behavioral economics, 17–18
Beneficial agreements, economic
sources of, 631–634
Benefit-cost analysis, 8, 17, 470–483
basics of, 474–476
direct elicitation and, 481
dollar values and, 475
efficiency vs.equity and, 475–476
indirect market measures and,
481–482
market values and, 480
net benefit rule and, 474
nonmarketed benefits and costs,
480–483
public goods and efficiency,
471–473
public project evaluation and,
476–480
valuing lives and, 482–483
Berkshire Hathaway, 614
Bertrand, Joseph, 373
Bertrand price competition, 373–374Best Buy, 413
Best price search, 563–566
Bezos, Jeff, 52, 375
Bidding. See alsoAuctions and
competitive bidding
bidder risk aversion, 690
equilibrium bidding strategies,
681–685
real-life bidding, 691–693
vs.bargaining, 672–673
Bilateral monopoly, 672–673
Bill and Melinda Gates Foundation, 18
Blackouts, electrical, 515–517
Blockbuster, 413
Blu-Ray DVD format, 412
Boeing, 254, 323, 352, 415, 452,
596, 598
Book publishers, E-book pricing and,
236–237
Borders Group, 3, 10, 414–415
Boundaries, firm, 595–596
BP, 4–5, 8, 9, 518–519
Brandenberger, Adam, 352
Bridges, public investment in,
477–480
Bristol-Myers, 15, 382
British Airways, 453
Budget constraints, 123
Buffet, Warren, 593, 614
Building contracts, 587–588
Bundling, 392–394
Burger King, 27
Burroughs Wellcome Co., 446–447
Business behavior
decision pitfalls and, 554–557
pricing in practice, 97–98
starting business, 229–231C
Cable TV subscribers, forecasting
and, 156–157
Calculus
marginal analysis and, 40–42
optimization techniques and,
62–71
Capital One, 132
Capital requirements, entry barriers
and, 323
Capitation approach, 590
Carson, Johnny, 642Cartels, 329–331
CBS, 642–645
Certainty equivalent, 519, 627
Challengerdisaster, 557–559
Chicago School approach, 451
Christie’s, 453
Cigarette industry, 98
Citicorp, 452
Clayton Act of 1914, 449
Clean Air Act of 1970, 466–467
Coal, clean, 733–734
Coal mining, returns to scale in,
199–200
Coase, Ronald, 594
Coase theorem, 461
Cobb-Douglas function, 208–210
Coca-Cola, 131, 323, 511
Coefficient of determination,
141–142
Collusion prevention, 453
Comcast, 453
Common-value settings, 689–690
Common values, winner’s curse and,
685–687
Comparative advantage,
international trade and, 244–247
Competition, repeated, 422–426
Competitive bidding. SeeAuctions
and competitive bidding
Competitive equilibrium, 289–295
decisions of competitive firm and,
289–292
firm’s supply curve and, 290–292
long-run equilibrium, 292
long-run market supply and,
294–295
market equilibrium, 292–295
price taking and, 289–290
Competitive procurement, 693–694
Competitive situations. See alsoGame
theory
communication and agreement
among competitors, 401
cooperative, 401
degree of mutual interest and,
400–401
information amount and, 402
noncooperative, 401
number of competitors and,
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