Thursday, September 12, 2002

"The Odd Couple", Fortune, May 1, 2000. Scott McNealy and Jack Welch discuss how the internet has changed business. This a chatty and lengthy interview. The middle part is the most interesting, especially around MCNEALY: "This is how the networking of business has changed everything. All of a sudden, demand curves are more important than supply curves. It's confusing for us, too. In the whole history of Sun we have never really known what the demand is, what the elasticities are, or what the 'right' prices are for our equipment." What does McNealy mean by saying that demand curves are now more important than supply curves? (I'm not sure myself.) According the McNealy and Welch (in 2000) what are the key market definition implications of the networking of business? 3:40:06 PM    comment []

"Ethanol For Fuel Fundamentally Uneconomic, Study Says", Daily University Science News, August 13, 2001. Take Dr. Pimentel's statements about the ethanol production process as a given (and suppose for a moment that there is no other possible way to make ethanol). Absent any government subsidy, is it possible that ethanol will ever become a demand substitute for gasoline in the eyes of automobile drivers? What needs to change before ethanol becomes a demand substitute for gasoline? [LINK: demand substitutes (1,2), production functions (4)] 3:39:17 PM    comment []

"Making Fares Fairer Why airline pricing can't be fundamentally changed without an overhaul of industry cost structures.", CFO, September 2002. What does the article suggest regarding whether United's business class fares are in the same market as Frontier's unrestricted fares? [LINK: demand substitutes, supply substitutes (1), self-selection schemes (11), conditions for tacit collusion (14)]   2:17:34 PM    comment []