Government policies- Price ceilings, price floors, excise taxes, and the economic effects of prohibition (alcohol, drugs, kidneys, etc) - Anthony Christofaro
October 1, 2011
Prohibition began with ratification of the 18th Amendment and enactment of the Volstead Act on January 16, 1920 and was repealed on December 5, 1933 with ratification of the 21st Amendment. I think it's widely known of the Prohibition era as a time for underground crime and mobsters. Whenever there's a demand for an illegal product, a black market will emerge. What was interesting to me that I learned in the following article was some of the reasoning behind the installation and repealment of Prohibition.
Prior to World War I, approximately one-third of the country's revenue was generated from the liquor tax. Then the income tax was created in 1913, which provided for two-thirds of the country's revenue and generated nine times more revenue than liquor taxes. This created less of a reliance on liquor taxes and as a result, government officials gave in to Puritans and anti-liquor lobbyists, thus beginning the age of Prohibition.
Then the Great Depression hit. Fewer people working meant substantially less taxable income and less revenues for the country. The government needed to seek a new source of revenue to make up for the shortfall. The most logical source was to re-legalize liquor sales and bring back liquor taxes, thus ending of Prohibition.
October 16, 2011
Although Prohibition ended nearly 80 years ago, there are still many localities in the U.S. that are dry or moist. The definition of these terms vary, but basically mean there is some limitation on alcohol sales in an area. For example, this may be a restriction on selling packaged alcohol or limiting establishments to only sell beer and wine (not liquor). As discussed in my previous post, Prohibition was primarily ended in order to increase sales tax revenue. Due to the current economic crisis we are seeing the same trend today.
An example is Lubbock County, Texas, where packaged alcohol sales was restricted to private clubs and certain establishments. After facing a $3.5 million deficit in 2009, the county decided to issue 86 alcohol permits to allow for the retail sale of packaged alcohol. It is estimated this could bring in up to $5 million per year in additional tax revenue.
Somewhat similar to this, there has been a push in recent years in Indiana to legalize sales of alcohol on Sundays. There has, however, been big pushback from the liquor stores, claiming the additional expenses they'd have to incur would negatively impact their business. They feel that this law would benefit the large grocery store chains like Wal-Mart that are already open on Sunday, thus not requiring the additional labor and capital needed to operate on Sundays. It is estimated that legalizing alcohol sales on Sundays in Indiana could increase tax revenue by $9 million per year.
October 23, 2011
I was wanting to talk a little bit about the effects of drinking on healthcare costs, and lucky me, a new study by the Centers for Disease Control & Prevention just came out. The study concluded that the economic costs of excessive alcohol use reached $223.5 billion in 2006. 72% of this cost was attributable to loss in work productivity, 11% to healthcare costs, and so on.
Approximately 42% of the total economic costs was borne by federal, state, and local governments, while 41.5% was borne by the excessive drinkers and their families. Looking only at healthcare costs, the government agencies paid approximately 61% of these expenses.
October 30, 2011
There has been a lot of discussion in recent years about lowering the drinking age from 21 to 18. While this is heavily debated, I think at some point in the near future this change will occur. We all know the number of underage drinking students is prevalent in college. The risks of getting caught drinking underage aren't enough of a deterrent for most college students to stop.
We learned that Prohibition didn't work in the 20's & we're seeing the same results now with the drinking age. I think this is another source of unrealized revenue for the U.S. Sure, at times, underaged drinkers are able to find someone 21+ to purchase alcohol for them. There's clearly no shortage of people willing & able to do so in college, but it may be harder to find someone outside of a college situation.
November 6, 2011
The sin tax is assessed by the government on socially undesirable products, such as alcohol & cigarettes. I think the intent of the sin tax is twofold, 1) to increase revenues to offset some of the healthcare costs incurred from the diseases that are contracted from the usage of the harmful products & 2) to increase the overall cost of the product so that it's not as easy for consumers to purchase. The increased costs reduce the demand for the products, as some consumers are only willing to pay so much for their vices. It may cause some consumers to quit drinking/smoking completely or reduce their intake considerably.
November 11, 2011
The first ever piece of legislation was presented this summer to Congress for legalizing Marijuana. We see a lot of similarities between Alcohol Prohibition and Marijuana Prohibition. Mainly that it doesn't work. There are numerous outlets for obtaining illegal drugs because the demand is there to support it. Regardless of the legality, people are willing to supply illegal drugs. They can make more money selling drugs than working any 9-5 job they could get. Punishment for getting caught is usually a slap on the wrist because people know that the class of punishment changes depending on the weight of the product so they will attempt to stay under these weight limits, that is unless they're a major drug trafficker. I think the legalization of marijuana is inevitable. The cost on the taxpayer for the goverment to control marijuana is a huge burden and it clearly isn't working. Instead, the government can realize a new revenue source for legalizing marijuana, which I think would be a huge swing and be particularly beneficial in the current economic times.
November 20, 2011
Here's a recent article about medical marijuana dispensaries in California. As most of you may be aware, California legalized medical marijuana in 1996 even though their law contradicts federal law. This has created conflict in the state. The DEA will raid these facilities, however, the facilities will open back up a day or two later. This is just another example of marijuana prohibition not working. There was an interesting documentary that came out a few years ago called Super High Me that elaborates on this state vs federal conflict in California.
Case Summary
Prohibition started on January 16, 1920 with the ratification of the 18th Amendment and enactment of the Volstead Act. It lasted until December 5, 1933 when Prohibition was repealed with ratification of the 21st Amendment. Prior to World War I, approximately one-third of the country's revenue was generated from the liquor tax. Then, in 1913, the income tax was introduced. This tax would generate two-thirds of the country's revenue and nine times that of the liquor tax. As a result, there became less of a reliance on the liquor tax, which caused government officials to give in to Puritans and anti-liquor lobbyists. Thus, the age of Prohibition began.
The demand for alcohol didn't just go away because of Prohibition. Since it was illegal, many people were willing to pay more money to acquire alcohol. And if people are willing to pay more money, then suppliers will enter the market because the suppliers will take on the added risk in return for increased price. This created the emergence of a black market during the time of Prohibition. Suppliers, known as bootleggers, smuggled in alcohol from Canada and overseas. Also, stills were acquired so alcohol could be made in secret locations for personal consumption or sale. The era of Prohibition was stricken with underground crime and corruption. Payoffs to political officials and law enforcement were commonplace in order to ease the movement of alcohol. Crime also increased drastically due to competing mobs or gangs who were willing to kill in order to cripple their competition or escape the law. One of the most notorious American mobsters, Al Capone, gained his fame during this era.
Then the Great Depression hit. Fewer people working meant substantially less taxable income, resulting in less revenue for the country. The government needed to seek out a new source of revenue to make up for the shortfall. The most logical source would be from alcohol sales. Clearly, the sale of alcohol was still occuring underground, meanwhile the government was not getting any "cut" of the sales. Additionally, the government incurred increased expenditures for crime prevention and their "war on Prohibition" even though it appeared not to be working effectively. These driving factors caused the end of Prohibition.
Although Prohibition ended nearly 80 years ago, there are still modern day examples of localized Prohibition. There are many localities across the country that are considered dry or moist, meaning there is some restriction on alcohol sales. For example, there are restrictions on selling packaged alcohol or limiting establishments to only sell beer and wine (not liquor). Some localities have "blue laws," which are restrictions imposed on Sunday alcohol sales, such as in Indiana.
Many of these restrictions have been challenged in recent years or are currently being challenged. The primary reason is the same as to why Prohibition was repealed in 1933. There is also the highly-debated drinking age of 21 and the possibility of reducing it to 18. Governments are seeking additional sources of revenue to make up for shortfalls stemming for the present day recession. For example, some estimate that legalizing Sunday alcohol sales in Indiana could increase tax revenue by $9 million per year.
Of course, as with anything, are the negative socioeconomic effects: increased healthcare costs, drunken driving accidents/fatalities, increased alcohol abuse, decrease in work productivity, etc. For example, a recent study by the Centers for Disease Control & Prevention was released, concluding that the economic costs of excessive alcohol use reached $223.5 billion in 2006. 72% of this cost was attributable to loss in work productivity, 11% to healthcare costs, etc. Approximately 42% of the total economic costs was borne by federal, state, and local governments, while 41.5% was borne by the excessive drinkers and their families. Looking only at healthcare costs, the government agencies paid approximately 61% of these expenses.
To offset some of the costs incurred from socially undesirable products, such as alcohol and cigarettes, the government assesses the sin tax. Additionally, the tax increases the total cost of these socially undesirable products, thereby reducing the demand for these products, as some consumers are only willing to pay so much for their vices. It may cause some consumers to quit drinking or smoking completely, or reduce their intake considerably.
Another example of modern day Prohibition is that of the illegal drug, marijuana. The first ever piece of legislation was presented this summer to Congress for legalizing Marijuana. There are a lot of similarities between Alcohol Prohibition and Marijuana Prohibition, mainly that it doesn't work. The same black market and the resulting smuggling, crime, and corruption exists now as it did during the Alcohol Prohibition in the 1920's and early 1930's.
While the most widely known form of Prohibition occurred in the 1920's and early 1930's, there are many examples of Prohibition in modern society. These restrictions are often challenged and highly debated. Weighing the positive versus negative socioeconomic benefits has proven challenging. There's a lot that can be learned when analyzing the effects of Prohibition during the 1920's and early 1930's and applying this to modern day situations.
Mini-Quiz
1. Whom of the following was a famous Prohibition-era mobster?
a) Jimmy Hoffa
b) Babe Ruth
c) Al Capone
d) John Gotti
2. Which Amendment started the age of Prohibition?
a) 18th Amendment
b) 19th Amendment
c) 20th Amendment
d) 21st Amendment
3. Which of the following were underlying causes for the start of Prohibition?
a) Puritans
b) Anti-liquor lobbyists
c) Introduction of income taxes
d) All of the above
4. What is the name given to the type of tax assessed on socially undesirable products?
a) Gross Receipts Tax
b) Vice Tax
c) Sin Tax
d) Immoral Tax
5. Which of the following are negative socioeconomic benefits for reduced restrictions on alcohol sales?
a) Loss in work productivity
b) Increased tax revenue
c) Increased drunken driving accidents/fatalities
d) Both a and c
Answers: 1. c) Al Capone; 2. a) 18th Amendment; 3. d) All of the above; 4. c) Sin Tax; 5. d) Both a and c
Case Summaries 1) Time Warner Memo 14 by Nathan Wenning - This paper talks about the a la carte pricing strategies of cable companies. Customers don't like paying for channels they don't use. As a result, Time Warner has been testing out new pricing strategies. The paper goes on to discuss the monopolistic competition in the cable market.
2) Supply and Demand by Thaddeus Bogardus - This paper defines several terms to get the reader familiar with supply and demand. Then the paper discusses the effects of supply and demand within four real world scenarios, specifically, wine, tablets, gas, and water/energy.
3) Market failure by Mark Wilk - The paper discusses four ways in which a market can fail: monopolies and antitrust, externalities, public goods, and rent seeking. The author gives one example for each category: Google for monopolies and antitrust, pollution for externalities, clean air for public goods, and labor unions for rent seeking.
4) Microsoft Case by David Schroeder - This paper discusses how dominant Google is in the online search and advertising market. The paper goes on to discuss how Google faces antitrust issues as they are alleged to vertically foreclose certain markets like the mobile search market.
5) NASDAQ Case by Charles Simpson - This paper discusses collusion in the NASDAQ market. Collusion can occur in many ways, such as insider trading, price fixing/rigging, information sharing to instigate a possible takeover, etc. The paper also relates the NASDAQ case to that of OPEC and how some consider it a cartel that manipulates the market.
- Anthony Christofaro
October 1, 2011
Prohibition began with ratification of the 18th Amendment and enactment of the Volstead Act on January 16, 1920 and was repealed on December 5, 1933 with ratification of the 21st Amendment. I think it's widely known of the Prohibition era as a time for underground crime and mobsters. Whenever there's a demand for an illegal product, a black market will emerge. What was interesting to me that I learned in the following article was some of the reasoning behind the installation and repealment of Prohibition.
Here's the story:
http://reason.com/archives/2007/07/31/the-politics-of-prohibition
Prior to World War I, approximately one-third of the country's revenue was generated from the liquor tax. Then the income tax was created in 1913, which provided for two-thirds of the country's revenue and generated nine times more revenue than liquor taxes. This created less of a reliance on liquor taxes and as a result, government officials gave in to Puritans and anti-liquor lobbyists, thus beginning the age of Prohibition.
Then the Great Depression hit. Fewer people working meant substantially less taxable income and less revenues for the country. The government needed to seek a new source of revenue to make up for the shortfall. The most logical source was to re-legalize liquor sales and bring back liquor taxes, thus ending of Prohibition.
October 16, 2011
Although Prohibition ended nearly 80 years ago, there are still many localities in the U.S. that are dry or moist. The definition of these terms vary, but basically mean there is some limitation on alcohol sales in an area. For example, this may be a restriction on selling packaged alcohol or limiting establishments to only sell beer and wine (not liquor). As discussed in my previous post, Prohibition was primarily ended in order to increase sales tax revenue. Due to the current economic crisis we are seeing the same trend today.
An example is Lubbock County, Texas, where packaged alcohol sales was restricted to private clubs and certain establishments. After facing a $3.5 million deficit in 2009, the county decided to issue 86 alcohol permits to allow for the retail sale of packaged alcohol. It is estimated this could bring in up to $5 million per year in additional tax revenue.
Somewhat similar to this, there has been a push in recent years in Indiana to legalize sales of alcohol on Sundays. There has, however, been big pushback from the liquor stores, claiming the additional expenses they'd have to incur would negatively impact their business. They feel that this law would benefit the large grocery store chains like Wal-Mart that are already open on Sunday, thus not requiring the additional labor and capital needed to operate on Sundays. It is estimated that legalizing alcohol sales on Sundays in Indiana could increase tax revenue by $9 million per year.
Here's a link to the story:
http://www.msnbc.msn.com/id/32956678/ns/us_news-life/t/governments-dip-deeper-alcohol-tax-well/
October 23, 2011
I was wanting to talk a little bit about the effects of drinking on healthcare costs, and lucky me, a new study by the Centers for Disease Control & Prevention just came out. The study concluded that the economic costs of excessive alcohol use reached $223.5 billion in 2006. 72% of this cost was attributable to loss in work productivity, 11% to healthcare costs, and so on.
Approximately 42% of the total economic costs was borne by federal, state, and local governments, while 41.5% was borne by the excessive drinkers and their families. Looking only at healthcare costs, the government agencies paid approximately 61% of these expenses.
http://ashlandcurrent.com/article/11/10/22/binge-drinking-costs-us-billions
October 30, 2011
There has been a lot of discussion in recent years about lowering the drinking age from 21 to 18. While this is heavily debated, I think at some point in the near future this change will occur. We all know the number of underage drinking students is prevalent in college. The risks of getting caught drinking underage aren't enough of a deterrent for most college students to stop.
We learned that Prohibition didn't work in the 20's & we're seeing the same results now with the drinking age. I think this is another source of unrealized revenue for the U.S. Sure, at times, underaged drinkers are able to find someone 21+ to purchase alcohol for them. There's clearly no shortage of people willing & able to do so in college, but it may be harder to find someone outside of a college situation.
http://www.indiana.edu/~engs/articles/cqoped.html
November 6, 2011
The sin tax is assessed by the government on socially undesirable products, such as alcohol & cigarettes. I think the intent of the sin tax is twofold, 1) to increase revenues to offset some of the healthcare costs incurred from the diseases that are contracted from the usage of the harmful products & 2) to increase the overall cost of the product so that it's not as easy for consumers to purchase. The increased costs reduce the demand for the products, as some consumers are only willing to pay so much for their vices. It may cause some consumers to quit drinking/smoking completely or reduce their intake considerably.
http://en.wikipedia.org/wiki/Sin_tax
November 11, 2011
The first ever piece of legislation was presented this summer to Congress for legalizing Marijuana. We see a lot of similarities between Alcohol Prohibition and Marijuana Prohibition. Mainly that it doesn't work. There are numerous outlets for obtaining illegal drugs because the demand is there to support it. Regardless of the legality, people are willing to supply illegal drugs. They can make more money selling drugs than working any 9-5 job they could get. Punishment for getting caught is usually a slap on the wrist because people know that the class of punishment changes depending on the weight of the product so they will attempt to stay under these weight limits, that is unless they're a major drug trafficker. I think the legalization of marijuana is inevitable. The cost on the taxpayer for the goverment to control marijuana is a huge burden and it clearly isn't working. Instead, the government can realize a new revenue source for legalizing marijuana, which I think would be a huge swing and be particularly beneficial in the current economic times.
http://www.tokeofthetown.com/2011/06/legislation_to_end_us_marijuana_prohibition_coming.php
November 20, 2011
Here's a recent article about medical marijuana dispensaries in California. As most of you may be aware, California legalized medical marijuana in 1996 even though their law contradicts federal law. This has created conflict in the state. The DEA will raid these facilities, however, the facilities will open back up a day or two later. This is just another example of marijuana prohibition not working. There was an interesting documentary that came out a few years ago called Super High Me that elaborates on this state vs federal conflict in California.
http://latimesblogs.latimes.com/lanow/2011/10/feds-cracking-down-on-california-medical-marijuana-dispensaries.html
Case Summary
Prohibition started on January 16, 1920 with the ratification of the 18th Amendment and enactment of the Volstead Act. It lasted until December 5, 1933 when Prohibition was repealed with ratification of the 21st Amendment. Prior to World War I, approximately one-third of the country's revenue was generated from the liquor tax. Then, in 1913, the income tax was introduced. This tax would generate two-thirds of the country's revenue and nine times that of the liquor tax. As a result, there became less of a reliance on the liquor tax, which caused government officials to give in to Puritans and anti-liquor lobbyists. Thus, the age of Prohibition began.
The demand for alcohol didn't just go away because of Prohibition. Since it was illegal, many people were willing to pay more money to acquire alcohol. And if people are willing to pay more money, then suppliers will enter the market because the suppliers will take on the added risk in return for increased price. This created the emergence of a black market during the time of Prohibition. Suppliers, known as bootleggers, smuggled in alcohol from Canada and overseas. Also, stills were acquired so alcohol could be made in secret locations for personal consumption or sale. The era of Prohibition was stricken with underground crime and corruption. Payoffs to political officials and law enforcement were commonplace in order to ease the movement of alcohol. Crime also increased drastically due to competing mobs or gangs who were willing to kill in order to cripple their competition or escape the law. One of the most notorious American mobsters, Al Capone, gained his fame during this era.
Then the Great Depression hit. Fewer people working meant substantially less taxable income, resulting in less revenue for the country. The government needed to seek out a new source of revenue to make up for the shortfall. The most logical source would be from alcohol sales. Clearly, the sale of alcohol was still occuring underground, meanwhile the government was not getting any "cut" of the sales. Additionally, the government incurred increased expenditures for crime prevention and their "war on Prohibition" even though it appeared not to be working effectively. These driving factors caused the end of Prohibition.
Although Prohibition ended nearly 80 years ago, there are still modern day examples of localized Prohibition. There are many localities across the country that are considered dry or moist, meaning there is some restriction on alcohol sales. For example, there are restrictions on selling packaged alcohol or limiting establishments to only sell beer and wine (not liquor). Some localities have "blue laws," which are restrictions imposed on Sunday alcohol sales, such as in Indiana.
Many of these restrictions have been challenged in recent years or are currently being challenged. The primary reason is the same as to why Prohibition was repealed in 1933. There is also the highly-debated drinking age of 21 and the possibility of reducing it to 18. Governments are seeking additional sources of revenue to make up for shortfalls stemming for the present day recession. For example, some estimate that legalizing Sunday alcohol sales in Indiana could increase tax revenue by $9 million per year.
Of course, as with anything, are the negative socioeconomic effects: increased healthcare costs, drunken driving accidents/fatalities, increased alcohol abuse, decrease in work productivity, etc. For example, a recent study by the Centers for Disease Control & Prevention was released, concluding that the economic costs of excessive alcohol use reached $223.5 billion in 2006. 72% of this cost was attributable to loss in work productivity, 11% to healthcare costs, etc. Approximately 42% of the total economic costs was borne by federal, state, and local governments, while 41.5% was borne by the excessive drinkers and their families. Looking only at healthcare costs, the government agencies paid approximately 61% of these expenses.
To offset some of the costs incurred from socially undesirable products, such as alcohol and cigarettes, the government assesses the sin tax. Additionally, the tax increases the total cost of these socially undesirable products, thereby reducing the demand for these products, as some consumers are only willing to pay so much for their vices. It may cause some consumers to quit drinking or smoking completely, or reduce their intake considerably.
Another example of modern day Prohibition is that of the illegal drug, marijuana. The first ever piece of legislation was presented this summer to Congress for legalizing Marijuana. There are a lot of similarities between Alcohol Prohibition and Marijuana Prohibition, mainly that it doesn't work. The same black market and the resulting smuggling, crime, and corruption exists now as it did during the Alcohol Prohibition in the 1920's and early 1930's.
While the most widely known form of Prohibition occurred in the 1920's and early 1930's, there are many examples of Prohibition in modern society. These restrictions are often challenged and highly debated. Weighing the positive versus negative socioeconomic benefits has proven challenging. There's a lot that can be learned when analyzing the effects of Prohibition during the 1920's and early 1930's and applying this to modern day situations.
Mini-Quiz
1. Whom of the following was a famous Prohibition-era mobster?
a) Jimmy Hoffa
b) Babe Ruth
c) Al Capone
d) John Gotti
2. Which Amendment started the age of Prohibition?
a) 18th Amendment
b) 19th Amendment
c) 20th Amendment
d) 21st Amendment
3. Which of the following were underlying causes for the start of Prohibition?
a) Puritans
b) Anti-liquor lobbyists
c) Introduction of income taxes
d) All of the above
4. What is the name given to the type of tax assessed on socially undesirable products?
a) Gross Receipts Tax
b) Vice Tax
c) Sin Tax
d) Immoral Tax
5. Which of the following are negative socioeconomic benefits for reduced restrictions on alcohol sales?
a) Loss in work productivity
b) Increased tax revenue
c) Increased drunken driving accidents/fatalities
d) Both a and c
Answers: 1. c) Al Capone; 2. a) 18th Amendment; 3. d) All of the above; 4. c) Sin Tax; 5. d) Both a and c
Bibliography
Boudreaux, Don. "The Politics of Prohibition." Reason.com. 31 July 2007. Web.
http://reason.com/archives/2007/07/31/the-politics-of-prohibition
Bowers, Paige. "Will the Recession Doom the Last Sunday Blue Laws?" Time.com. 22 Feb. 2009. Web.
http://www.time.com/time/nation/article/0,8599,1880340,00.html
Current, Ashland. "Binge Drinking Costs U.S. Billions." AshlandCurrent.com. 22 Oct. 2011. Web.
http://ashlandcurrent.com/article/11/10/22/binge-drinking-costs-us-billions
Elliott, Steve. "Legislation To End U.S. Marijuana Prohibition Coming Thursday." Tokeofthetown.com. 22 June 2011. Web.
http://www.tokeofthetown.com/2011/06/legislation_to_end_us_marijuana_prohibition_coming.php
Engs, Ruth C. "Why Drinking Age Should Be Lowered: An Opinion Based upon Research." Indiana.edu. 20 Mar. 1998. Web.
http://www.indiana.edu/~engs/articles/cqoped.html
Hoeffel, John. "Feds Cracking down on California Medical Marijuana Dispensaries." Latimes.com. 06 Oct. 2011. Web.
http://latimesblogs.latimes.com/lanow/2011/10/feds-cracking-down-on-california-medical-marijuana-dispensaries.html
Hudson Jr., David L. "Blue Laws." Firstamendmentcenter.org. 16 Sept. 2002. Web.
http://www.firstamendmentcenter.org/blue-laws
Johnson, M. Alex. "Governments Dip Deeper into Alcohol Tax Well." Msnbc.com. 28 Sept. 2009. Web.
http://www.msnbc.msn.com/id/32956678/ns/us_news-life/t/governments-dip-deeper-alcohol-tax-well/
"Sin Tax." Wikipedia.org. Web.
http://en.wikipedia.org/wiki/Sin_tax
Thornton, Mark. "The Economics of Prohibition." Mises.org. 1991. Web.
http://mises.org/books/prohibition.pdf
Wastler, Allen. "High Court's Pot Mistake." Money.CNN.com. 07 June 2005. Web.
http://money.cnn.com/2005/06/07/commentary/wastler/wastler/
Case Summaries
1) Time Warner Memo 14 by Nathan Wenning - This paper talks about the a la carte pricing strategies of cable companies. Customers don't like paying for channels they don't use. As a result, Time Warner has been testing out new pricing strategies. The paper goes on to discuss the monopolistic competition in the cable market.
2) Supply and Demand by Thaddeus Bogardus - This paper defines several terms to get the reader familiar with supply and demand. Then the paper discusses the effects of supply and demand within four real world scenarios, specifically, wine, tablets, gas, and water/energy.
3) Market failure by Mark Wilk - The paper discusses four ways in which a market can fail: monopolies and antitrust, externalities, public goods, and rent seeking. The author gives one example for each category: Google for monopolies and antitrust, pollution for externalities, clean air for public goods, and labor unions for rent seeking.
4) Microsoft Case by David Schroeder - This paper discusses how dominant Google is in the online search and advertising market. The paper goes on to discuss how Google faces antitrust issues as they are alleged to vertically foreclose certain markets like the mobile search market.
5) NASDAQ Case by Charles Simpson - This paper discusses collusion in the NASDAQ market. Collusion can occur in many ways, such as insider trading, price fixing/rigging, information sharing to instigate a possible takeover, etc. The paper also relates the NASDAQ case to that of OPEC and how some consider it a cartel that manipulates the market.