Hospital mergers

This opinion in the WSJ argues that mergers between hospitals create value. 

Summary from James Dearden: "Stand-alone hospitals have too few patients to thrive in the new era of population health management. The opinion piece addresses the three rationales for horizontal mergers: economies of scale or scope, improvements in the quality of service, and increased market power."

Does Amazon understand the Nash Bargaining equilibrium

This article from the WSJ reports that Amazon has offered to let Hatchette's authors keep 100% of the revenues for books sold on Amazon while Amazon and Hatchette negotiate a contract: . Amazon wants a larger share of the revenue and lower book prices.

Does the offer improve Amazon's bargaining position?

Internet Providers and Switching Costs

This story from Planet Money discusses why customers in the US have less options from which to choose for Internet than consumers in other countries.

Leverage?

This article from the LA Times describes the offer AT&T made for DirectTV. An escape clause cancels the offer if DirectTV is unable to renew its contract with the NFL. How would this affect the outcome of the contract between DirectTV and the NFL in the Nash Bargaining Solution?

Boeing plays tough

This article from Reuters is an account of Boeing's reaction when union leaders reject Boeing's offer of a contract that would have eliminated pensions; Boeing announced that it is drawing up a short list of possible locations in which to build the 777x. The article illustrates bargaining and game theory. The short list raises the disagreement outcome for Boeing and reduces the disagreement outcome for the union. The short list also could be viewed as a threat or signal in sequential game.

The air up there

This story form Marketplace is a great example of externalities and how clearly defined property rights leads to mutually beneficial trades. (The audio is way more fun than the transcript.) Coase would be proud. It also mentions how restrictions on trade affect bargaining positions and market outcomes.

For an example of how markets for air rights may have failed, click here. 

The two stories might be fodder for a class discussion about why the market for air rights might be "good" when the two parties are developers or landowners, and "bad" when one party is Central Park. 

Bargaining

http://www.nytimes.com/2012/12/09/business/getting-to-yes-offers-clues-to-fiscal-talks.html?ref=todayspaper&_r=0 is a good example of how switching costs affects bargaining outcomes.