1. ©2016 John M. Abowd and Jennifer P. Wissink, all rights reserved.
The End Lecture 28
Dr. Jennifer P. Wissink
©2016 John M. Abowd and Jennifer P. Wissink, all rights reserved.
May 11, 2016

2. WISSINK Econ 1110 FINAL EXAM INFO & OTHER GRADING POLICY: Please see class syllabus (on our web page), Bb announcements and Bb FAQs. And all the best to everyone!
Final is cumulative but will stress material since prelim 2 a little more than all the other material. Lecture content since prelim 2 is worth taking a real good look at. Especially all the graphs. See this link for great stufy guide of questions you should be able to answer:
Check for office hour info.
First Final Exam is Thursday May 19 from 9:00am to 11:30am in Kennedy 116 “Call Aud”. People w/extra time or quiet conditions will start at 9:00am in Uris 262.
Second Final is Monday May 23 from 9:00am to 11:30am in Barton Hall Center & East (so the Teagle Hall side of Barton and the center, but NOT the west!). People w/extra time or quiet conditions will start at 9:00am in Uris 262.
Make sure you bring your Cornell Student ID to the exam or some other picture ID.
Everyone will be individually checked in with the TA that Student Center has you attached to. PLEASE make sure you KNOW this information before you arrive at the final so you can get to the correct TA table to check in quickly.
When you check in you will get an index card. You should immediately find a seat and fill out the card. Place the completed card and your ID out in front of you. In Barton: everyone should sit only 2 to a table at either ends of the table. In Kennedy: Please sit at least 2 seats from the nearest person.
Make sure to bring a simple calculator, a ruler and a couple/three pens & pencils.
The format for the final will be similar to the prelims. Multiple Choice (and maybe a few just fill in the blank in the m.c. section). Then multi-part problems. And maybe something a little different. The final is 2.5 hours long and usually students have plenty of time. I don't have any more finals to post. There is plenty of sample stuff already up there on the web site. Don't forget to get to the exam location early and KNOW WHAT SECTION YOU ARE OFFICIALLY REGISTERED IN, so you can check in quickly at the correct TA's table. Make sure you bring a photo ID. Make sure you bring a simple calculator. I think that covers it for now... Thanks!

3. Chamberlin: So, Does Conscious Parallelism Happen?
With only a couple/few identical firms, and homogeneous output, this might be expected.
However, when firms have different cost structures…
w/o collusion suppose you get the Cournot-Nash Joint Profit
w/o collusion suppose you get the Cournot-Nash Joint Profit
w/ collusion you get/want “Collusive Monopoly” Joint Profit
w/ collusion you get/want “Collusive Monopoly” Joint Profit

4. Sample Problem Solving: Assume: N=2 and QD=6-1/2P  PD=12-2Q, where Q=q1+q2 Assume: tc1=tc2=0  mc1=mc2=0

5. So What Oligopoly Model Is The One?
Depends on the particular industry.
Requires lots of investigation and appeals to empirical information.
Does profit look to be positive?
Does price appear to be greater than marginal cost?
Different markets require using different models of oligopoly behavior.

6. IO-Summary: Can You Fill This Table In?

7. How About Explicit Collusion
How About Explicit Collusion? When Duopolists Mimic a Multi-Plant Monopoly
mcIran
marginal costcartel
mcSA

8. How About Explicit Collusion
How About Explicit Collusion? When Duopolists Mimic a Multi-Plant Monopoly
mcIran
marginal costcartel
mcSA
Demandcartel
marginal revenuecartel
Volatility Returns to Oil Market After OPEC Deal Fails

9. Collusion Story With a Cornell Connection #1
The Archer Daniels Midland (ADM) investigation has been characterized by the Department of Justice, Antitrust Division, as one of the largest criminal antitrust cases in United States history. Since August 1996, at least seven cases were filed (back then) against eight companies and ten individuals charging price fixing and allocating sales volumes of lysine and/or citric acid worldwide.
Lysine, a $600 million a year industry (back then), is used by farmers as a feed additive to ensure proper growth of poultry and swine. Citric acid, a $1.2 billion a year industry (back then), is a flavor additive and preservative produced from various sugars and is found in soft drinks, processed foods, detergents, and pharmaceutical and cosmetic products. Eight corporate defendants and six individual defendants pled guilty and were fined in excess of $190 million. Most of the defendants were from overseas.
In October 1996, ADM was sentenced to pay a $100 million fine for its participation in the lysine and citric acid conspiracies. At the time, it was the largest criminal fine ever imposed in an antitrust case. On September 17, 1998, three former ADM executives were convicted of participating in the lysine conspiracy following a nine-week trial . This trial was one of the Antitrust Division's highest profile and most successful criminal cases in its history.
Mark Whitacre was key. He was the guy who was the ADM informant and even served jail time, for this and other crimes….
Cornell connection: he earned a Ph.D. in Nutritional Biochemistry from Cornell University (1983).
There is a book (among others) entitled The Informant by Kurt Eichenwald that chronicles what happened. It was turned into a movie, The Informant, a dark comedy thriller film, starring Matt Damon.

10. Collusion Story With a Cornell Connection #2
Quoting… The Justice Department last week (back then) sued the eight Ivy League colleges and MIT, plus "various other. . .co-conspirators," for allegedly violating the Sherman Antitrust Act "by illegally conspiring to restrain price competition on financial aid" to prospective undergraduate students. …The Ivy League colleges signed a consent decree that settles the suit against them. MIT declined to sign. …aides refused to say how the suit would affect the rest of the reported group of 57 colleges which have been under investigation since In the decree, the Ivy League defendants--Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, the University of Pennsylvania and Yale--agree that they will no longer collude or conspire on financial aid. They also agreed not to discuss or agree on future tuition or faculty salary increases.
MIT BALKS, Ivies Settle Antitrust Suit on Aid, By Kenneth D. Campbell
From TechTalk, Published by the MIT News Office at the Massachusetts Institute of Technology, Cambridge, Mass. May 29, 1991
MIT Agrees to Settle Antitrust Suit, U.S. Says
December 23, 1993,
i>clicker question: Do you buy the MIT argument that price fixing was good for the students and their families?
YES!
Nope.

11. The End - Amen Study hard. Use the class web pages – stay informed.
Work loads of problems.
Eat well.
Take a walk once in a while.
Get some sleep.
Don’t survive on
And last but not least....
Thanks to YOU ALL for a great semester!!
And thanks to the TAs for all their hard work.
Best of luck on all your finals. I’m looking for good things from you all in our final!!