管理经济学英文版最新版教学课件第7章

CHAPTER7TheNatureofIndustryChapterOutline•Marketstructure–Firmsize–Industryconcentration–Technology–Demandandmarketconditions–Potentialforentry•Conduct–Pricingbehavior–Integrationandmergeractivity–Researchanddevelopment–Advertising•Performance–Profit–Socialwelfare•Thestructure-conduct-performanceparadigm–Causalview–Feedbackcritique–RelationtotheFiveForcesFramework7-2ChapterOverviewIntroduction•Chapter6focusedontheoptimalwaytoacquiretheefficientmixofinputs,andhowtosolvevariousprincipal-agentproblemsthatarisewithinthefirm.•Thischapterprovidesanoverviewofthenatureofvariousindustries.–Howconcentratedaresalesinoneindustryrelativetoanother?–Howdoprice-costmarginsvarybyindustry?–HowdoadvertisingandR&Dexpendituresvarybyindustry?7-3ChapterOverviewMarketStructure•Marketstructurefactorsthatimpactmanagerialdecisions:–Numberoffirmscompetinginanindustry.–Relativesizeoffirms(concentration).–Technologicalandcostconditions.–Demandconditions.–Easeoffirmexitorentry.7-4MarketStructureIndustryConcentration•Measuresthesizedistributionoffirmswithinanindustry.–Aretheremanysmallfirms?–Arethereonlyafewlargefirms?7-5MarketStructureMeasuringIndustryConcentration•Measuresofindustryconcentration–Four-firmconcentrationratio:𝐶4=𝑆1+𝑆2+𝑆3+𝑆4𝑆𝑇–Herfindahl-Hirschmanindex(HHI):𝐻𝐻𝐼=10,000𝑆𝑖𝑆𝑇2𝑁𝑖=17-6MarketStructureMeasuringIndustryConcentrationinAction•Supposeanindustryiscomposedofsixfirms.Fourfirmshavesalesof$10each,andtwofirmshavessalesof$5each.Whatisthefour-firmconcentrationratioforthisindustry?•Answer:–Totalindustrysalesare𝑆𝑇=$50.–Salesofthefourlargestfirmsare$40.–Thefour-firmconcentrationratiois:𝐶4=$10+$10+$10+$10$50=0.80–Thefourlargestfirmsintheindustryaccountfor80percentoftotalindustryoutput.7-7MarketStructureMeasuringIndustryConcentrationInAction7-8IndustryC4(percentage)HHIDistilleries701,519Fluidmilk461,075Motorvehicles681,744Snackfoods531,984Furnitureandrelatedproducts1162Semiconductorandotherelectroniccomponents34476Softdrinks52891MarketStructureLimitationsofConcentrationMeasures•Factorsthatimpactandlimitindustryconcentrationmeasuresinclude:–Globalmarkets.–National,regionalandlocalmarkets.–Industrydefinitionsandproductclasses.7-9MarketStructureTechnologyandCosts•Industriesdifferinregardtothetechnologiesusedtoproducegoodsandservices.–Labor-intensiveindustries.–Capital-intensiveindustries.•Withinagivenindustryiftheavailabletechnologyis:–thesame,firmswilllikelyhavesimilarcoststructures.–different,onefirmwilllikelyhaveacostadvantage.7-10MarketStructureDemandandMarketConditions•Industrieswith–lowdemandmayimplyfewfirms.–highdemandmayimplymanyfirms.•Elasticityofdemandvariesfromindustrytoindustry.–TheRothschildindexmeasuresthesensitivitytopriceofaproductgroupasawholerelativetothesensitivityofthequantitydemandedofasinglefirmtoachangeinitsprice.𝑅=𝐸𝑇𝐸𝐹7-11MarketStructureDemandandMarketConditionsinAction•Theindustryelasticityofdemandforairlinetravelis-3,andtheelasticityofdemandforanindividualcarrieris-4.WhatistheRothschildindexforthisindustry?•Answer:–TheRothschildindexis:𝑅=−3−4=0.757-12MarketStructureDemandandMarketConditionsInAction7-13IndustryOwnPriceElasticityofMarketDemandOwnPriceElasticityofDemandforRepresentativeFirmRothschildIndexFood-1.0-3.80.26Tobacco-1.3-1.31.00Textiles-1.5-4.70.32Apparel-1.1-4.10.27Paper-1.5-1.70.88Chemicals-1.5-1.51.00Petroleum-1.5-1.70.88MarketStructurePotentialforEntry•Optimaldecisionsbyfirmsinanindustrywilldependontheeasewithwhichnewfirmscanenterthemarket.•Severalfactorscancreatebarrierstoentry(ormakeentrydifficult).–Capitalrequirements.–Patents.–Economiesofscale.7-14MarketStructureConduct•Behavioroffirms:–Pricemarkupovercosts.–Integrationandmerger.–Advertisingexpenditures.–Researchanddevelopmentexpenditures.7-15ConductPricingBehavior•Lernerindex–Ameasureofthedifferencebetweenpriceandmarginalcostasafractionoftheproduct’sprice.𝐿=𝑃−𝑀𝐶𝑃rearrangingthisequationyields𝑃=11−𝐿𝑀𝐶,where11−𝐿isthemarkupfactorovermarginalcosts.7-16ConductPricingBehaviorinAction•Afirmintheairlineindustryhasamarginalcostof$200andchargesapriceof$300.WhataretheLernerindexandmarkupfactor?–TheLernerindexis𝐿=𝑃−𝑀𝐶𝑃=$300−$200$300=13•Themarkupfactoris11−𝐿=11−13=1.57-17ConductPricingBehaviorInAction7-18IndustryLernerIndexMarkupFactorFood0.261.35Tobacco0.764.17Textiles0.211.27Apparel0.241.32Paper0.582.38Chemicals0.673.03Petroleum0.592.44ConductIntegrationandMergerActivity•Integration–Unitingproductiveresourcesoffirms.–CanoccurthroughamergerORduringtheformationofafirm.•Merger–Twoormoreexistingfirms“unite,”ormerge,intoasinglefirm.•Reasonsfirmsmerge:–Reducetransactioncosts.–Reapbenefitsofeconomiesofscaleandscope.–Increasemarketpower.–Gainbetteraccesstocapitalmarkets.7-19ConductTypesofIntegration•Verticalintegration–Variousstagesintheproductionofasingleproductarecarriedoutinasinglefirm.•Horizontalintegration–Mergingtwoormoresimilarfinalproductsintoasinglefirm.•Conglomeratemergers–Integrationoftwoormoredifferentproductlinesintoasinglefirm.7-20ConductResearchandDevelopment•Researchanddevelopment–Expendituresmadebyfirmsto