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Friday, November 08, 2002 |
"Dot-Com IPO Pricing Baffles Economists", WSJ September 30, 2002. (Apologies for white line created by copier problem.)
The article presents several potential explanation for IPO underpricing: (1) compensation for bearing risk, (2) indifferent executives, (3) "bogus belief" about importance of buzz due to "thought contagion", or (4) subversion by executives in exchange for personal access to other IPOs. What do you think?
[Categories: Moral Hazard]
1:49:48 PM 
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"Drug Cost-Control Plans Push Many to Do Without", WSJ October 29, 2002.
Doubling a uniform co-payment from $5 to $10 per prescription lowered per person drug costs from $725 to $563, a 22% drop. But doubling co-payment using a two-tiered system of (cheaper) preferred drugs and non-preferred drugs led to a 33% drop in per person costs. Explain why one would expect this result, that a two-tiered system will reduce spending by more.
[Categories: Insurance, Moral Hazard]
1:35:26 PM
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© Copyright 2002 David McAdams.
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