Markets clearly do not operate efficiently 100% of the time. Skim the recent headlines of your favorite news source and provide one clear example of market "failure". Please provide your source in your post!
The earthquake in Japan caused great devastation. However, no one could have seen quite how much devastation the event could have caused until now. Not only are people suffering greatly to rebuild their damaged homes and buildings but their economy is slowly trying to make progress for the better. the Japan economy is having many issues as an aftermath of the earthquake and destruction of some businesses. The us economy is also connected to the Japanese economy and is being affected as well.
The NFL is having a very tough time getting its 2011 season inked in. The NFLPA and the owners cant agree on how to split a multi billion dollar revenue. If no agreement is met then this market, of professional football, will fail. Millions of Americans will no longer purchase and spend money on NFL products and the economy of spending/consuming will take another hit and go down.
The New York Times is now going to start charging those who view 20 articles every four weeks a subscription charge. To me this seems to be a market "failure" because in doing this they will lose a lot of readers because of the requirement of subscriptions for those who read their news frequently. I assume this is to increase revenue, however I think the subscriptions won't necessarily mean more profit because they aren't using all of their resources wisely/efficiently.
This is an article about a superior company buying out a smaller company. AT&T bought out T-Mobile because T-Mobile is struggling in the industry. Its hard to keep up with companies like Verizon, AT&T, and Sprint. Since T-Mobile was starting to have negative economic profit and the CEO decided if it was best to sell the company. The wireless telephone industry is an oligopoly and its very hard to be a competing company.
"The federal Food and Drug Administration is asking a Wisconsin firm tied to infections and death blamed on contaminated medical wipes to voluntarily stop making and distributing its drug products....The move is aimed at halting operations at H&P Industries Inc., which does business as the Triad Group of Hartland, Wis....'We have evidence that shows this firm made and distributed products with a variety of opportunistic pathogens'"
One example of market failure is the bankruptcy of Borders Books in 2011. The companies poor distribution system has led to the inefficient allocation of books to there retail locations. The failure to compete with Amazons prices and to compete with the e-book market were also key factors that led this company to fail. Borders was a big player in the market for books and now there market share will be absorbed by Barnes and Noble, Amazon, and Kindle.
The recent drama of AT&T buying out T-Mobile shows many problems relating to the topics discussed in Chapter 9. First off, T-Mobile represents a failing market structure because within recent years their costs have outweighed their revenue, and now they can no longer afford to compete with other leading companies. All of their costs began to build up and with a lack of revenue, they had no choice but to sell the company. This article deals with Sprint's reaction to this deal between the two companies and they are angry because of the possible outcome's affect on them. If AT&T grows even larger, Sprint will have that much harder of a time competing with them and Verizon. Sprint could eventually have the same situation as T-Mobile, and be forced to make tough decisions.
An example of market failure would be the example of AT&T buying out T-Mobile from Deutsche Telekom for $39 billion. T-Mobile as of lately has been having a very difficult time competing against the other big phone companies such as Sprint, Verizon, and their new owners AT&T. T-Mobile was not able to keep up with the technological advances and at the same time have their customers renew their contracts.
http://sports.espn.go.com/nfl/news/story?id=6270467 The NFL has decided to have a lockout for the 2011 season as the owners and players could not reach agreements on certain issues. The representatives of the players union are trying to reach agreements that will allow the players of today to have better health and living in the future; however, the owners are not budging. There are also players that are defending their right to disband as a union and file the antitrust suit. During the lockout players aren't being paid and are not receiving any health insurance. Obviously this is an issue that is planned to be fixed, but it'll take some time to do so.
An example of possible market failure is the lockout for the 2011 NFL season. The NFL and NFLPA are unable to come to an agreement on the number games to be played in a single season. This would lead to market failure because if the lockout continues there would be no market revenue for the NFL in tickets, merhandise, and advirtisements causing sure failure.
Some brands of cars are going to be hard to purchase because of the earthquake in Japan. Japan has closed many auto plants and because of the earthquake and tsunami so dealers wont be able to keep up with the demand of certain brands. They will fail to provide the amount of cars that the market desires. http://www.nytimes.com/2011/03/31/business/31auto.html?_r=1&ref=business
http://sports.espn.go.com/nfl/news/story?id=6268087 The NFL seems to be a hot topic because well it's big news. This is the first professional sports "lockout" since the NHL had one in the 2004-2005 season. I use the term "lockout" loosely because there are still some owners who are optimistic, like Bud Adams of the Tennessee Titans who, in this article, guarantees there will be football played this season and that it will just require a few extra months of negotiations. The NFL has failed to agree between the owners and the collective representatives of the players among the teams to a bargaining agreement to allow them to play. If they are unable to reach an agreement like Bud Adams hopes then the NFL will not be paying players this season and will lose all of the revenue from the games that are not being played. The NFL will take a catastrophic hit while the owners continue to sit pretty and control their teams respectively. Charlie Newton
The sports examples are great; imperfect information abounds! Plus, there are positive and negative spillover effects all over the place. We will try to address a few of these next week!
In this article it states that Ireland is in a current economic crises due to home foreclosure's and defaulted loans from their housing market, just like the crisis of credit video shown in class. They are trying to get bailed out by the government and save their economy before it gets even worse.
An example of market failure is the removal of several channels from the iPad app. Apple had imperfect information of the contract Time Warner has with major media companies. As a result these companies “claimed that the iPad app is a contract violation” and the channels were removed. This results in market failure for Apple because they will lose customers and money.
An example of market failure in the world right now is Google's current relationship and progress in china. For the past year, Google has maintained a struggle with China's Internet regulation policies and Google's free information views. This shows market failure by negative externalities that exist in China by not having unlimited information to citizens in China.
Market failure reaches out to more than just the economy but it can also be seen in politics. I'm not really into politics but its pretty obvious that imperfect information and sometimes no information is present in politics. People voted for Barrack Obama on his promise that he would reform healthcare, change wall street laws, change immigration laws, and shut down guantanamo bay. he did the first two but he has yet to do anything about the second two. he gave us imperfect information which lead to us to ote for him. But he failed to follow through with all of his promises and we failed to vote for a president who would go through with all said promises. that is an example of market failure through imperfect information.
The housing failure is still resonating throughout the housing industry. People are still loosing their homes that they bought through sub-prime loans, all because of imperfect information given to them, and because banks need to sell homes to make money, they are causing negative externalities to those whose homes are depreciating.
My favorite sports team, the San Diego Padres were recently listed as Forbes' most profitable MLB team, which fueled a lot of anger within the San Diego community regarding the teams recent trade of their best/most popular player, Adrian Gonzalez. This has led to speculation that attendance may drop because the fans are upset and are accusing Padre owner Jeff Moorad of embezzling money. The truth is that the Forbes article posted statistics that didn't show the whole picture. The media, in this case, provides a huge negative externality that Moorad could not have been aware of before purchasing the Padres a couple years back but it may cost him some money this year if fans remain ignorant and upset.
The potential merger of Sprint and AT&T demonstrates market failure. Because Sprint depends on the AT&T network, if the merger between AT&T and T-Mobile takes place, a monopoly will be formed. Since sprint opposes this idea, if it takes place represents a failure. Sprints senior vice-president explains this problem as, bad for consumers. "It's bad for industry. It's bad for the country. It creates a huge duopoly. We don't see how it can fixed." They are trying to have the government ban this merger, in order to have this approved it needs to go through the Federal Communications Commission.
The steady rise in gas prices, is a clear sign of market failure not only for the oil industry, but for the automotive as well. With high gas prices people are beginning to cut back on driving, which results in decrease in profit for oil companies, and less purchases of new vehichles. This will could slowly end in market failure for both markets if prices keep increasing.
An example of market failure is the continuing argument about healthcare. The high prices of healthcare prevents everyone from having the ability to receive it. It is a public good because some people are using more than others which in turn makes it more expensive.
The fact that the Sacramento Kings are strongly considering leaving for Sacramento for Anaheim is an example of market failure. The combination of unsuccessful teams of the past few years and ticket prices that many people, in this economy, aren't willing to pay for to see a losing team has led to this. The 82 game schedule has caused for an abundant supply of games but the demand for a Kings ticket just isn't what it used to be in the late 1990's early 2000's when the team experienced a lot of success. As this article states it will also cause in a failure of other markets in Sacramento like the charities running the concession stands.
The Playstation network often has its shortcomings. It is free to anyone who has a playstation. Due to it being free, the Playstation company has no incentive to go all the way for the customer in terms of service and product. There is no information regarding their network that customers can access. There is a serious lack of information given to the customers. http://www.bbc.co.uk/news/technology-13169518
The earthquake in Japan caused great devastation. However, no one could have seen quite how much devastation the event could have caused until now. Not only are people suffering greatly to rebuild their damaged homes and buildings but their economy is slowly trying to make progress for the better. the Japan economy is having many issues as an aftermath of the earthquake and destruction of some businesses. The us economy is also connected to the Japanese economy and is being affected as well.
ReplyDeletehttp://seattletimes.nwsource.com/html/businesstechnology/2014518708_apasjapanearthquakepowercrunch.html
http://sports.espn.go.com/nfl/draft2011/news/story?id=6267118
ReplyDeleteThe NFL is having a very tough time getting its 2011 season inked in. The NFLPA and the owners cant agree on how to split a multi billion dollar revenue. If no agreement is met then this market, of professional football, will fail. Millions of Americans will no longer purchase and spend money on NFL products and the economy of spending/consuming will take another hit and go down.
The New York Times is now going to start charging those who view 20 articles every four weeks a subscription charge. To me this seems to be a market "failure" because in doing this they will lose a lot of readers because of the requirement of subscriptions for those who read their news frequently. I assume this is to increase revenue, however I think the subscriptions won't necessarily mean more profit because they aren't using all of their resources wisely/efficiently.
ReplyDeletehttp://www.cnn.com/video/#/video/us/2011/03/28/chernoff.ny.times.pay.wall.cnn?hpt=T2
http://latimesblogs.latimes.com/technology/2011/03/sprint-att-t-mobile-deal-opposition-antitrust-phone-telecommunications.html
ReplyDeleteThis is an article about a superior company buying out a smaller company. AT&T bought out T-Mobile because T-Mobile is struggling in the industry. Its hard to keep up with companies like Verizon, AT&T, and Sprint. Since T-Mobile was starting to have negative economic profit and the CEO decided if it was best to sell the company. The wireless telephone industry is an oligopoly and its very hard to be a competing company.
"The federal Food and Drug Administration is asking a Wisconsin firm tied to infections and death blamed on contaminated medical wipes to voluntarily stop making and distributing its drug products....The move is aimed at halting operations at H&P Industries Inc., which does business as the Triad Group of Hartland, Wis....'We have evidence that shows this firm made and distributed products with a variety of opportunistic pathogens'"
ReplyDeletehttp://www.msnbc.msn.com/id/42275174/ns/health-infectious_diseases/
One example of market failure is the bankruptcy of Borders Books in 2011. The companies poor distribution system has led to the inefficient allocation of books to there retail locations. The failure to compete with Amazons prices and to compete with the e-book market were also key factors that led this company to fail. Borders was a big player in the market for books and now there market share will be absorbed by Barnes and Noble, Amazon, and Kindle.
ReplyDeleteSource: http://www.latimes.com/business/la-fi-0217-borders-bankruptcy-20110217,0,3898820.story
Dayna Wheatley
http://latimesblogs.latimes.com/technology/2011/03/sprint-att-t-mobile-deal-opposition-antitrust-phone-telecommunications.html
ReplyDeleteThe recent drama of AT&T buying out T-Mobile shows many problems relating to the topics discussed in Chapter 9. First off, T-Mobile represents a failing market structure because within recent years their costs have outweighed their revenue, and now they can no longer afford to compete with other leading companies. All of their costs began to build up and with a lack of revenue, they had no choice but to sell the company. This article deals with Sprint's reaction to this deal between the two companies and they are angry because of the possible outcome's affect on them. If AT&T grows even larger, Sprint will have that much harder of a time competing with them and Verizon. Sprint could eventually have the same situation as T-Mobile, and be forced to make tough decisions.
An example of market failure would be the example of AT&T buying out T-Mobile from Deutsche Telekom for $39 billion. T-Mobile as of lately has been having a very difficult time competing against the other big phone companies such as Sprint, Verizon, and their new owners AT&T. T-Mobile was not able to keep up with the technological advances and at the same time have their customers renew their contracts.
ReplyDeletehttp://www.androidguys.com/2011/03/20/att-buying-tmobile/
http://sports.espn.go.com/nfl/news/story?id=6270467
ReplyDeleteThe NFL has decided to have a lockout for the 2011 season as the owners and players could not reach agreements on certain issues. The representatives of the players union are trying to reach agreements that will allow the players of today to have better health and living in the future; however, the owners are not budging. There are also players that are defending their right to disband as a union and file the antitrust suit. During the lockout players aren't being paid and are not receiving any health insurance. Obviously this is an issue that is planned to be fixed, but it'll take some time to do so.
An example of possible market failure is the lockout for the 2011 NFL season. The NFL and NFLPA are unable to come to an agreement on the number games to be played in a single season. This would lead to market failure because if the lockout continues there would be no market revenue for the NFL in tickets, merhandise, and advirtisements causing sure failure.
ReplyDeletehttp://sports.espn.go.com/nfl/news/story?id=6243983
Some brands of cars are going to be hard to purchase because of the earthquake in Japan. Japan has closed many auto plants and because of the earthquake and tsunami so dealers wont be able to keep up with the demand of certain brands. They will fail to provide the amount of cars that the market desires.
ReplyDeletehttp://www.nytimes.com/2011/03/31/business/31auto.html?_r=1&ref=business
http://sports.espn.go.com/nfl/news/story?id=6268087
ReplyDeleteThe NFL seems to be a hot topic because well it's big news. This is the first professional sports "lockout" since the NHL had one in the 2004-2005 season. I use the term "lockout" loosely because there are still some owners who are optimistic, like Bud Adams of the Tennessee Titans who, in this article, guarantees there will be football played this season and that it will just require a few extra months of negotiations. The NFL has failed to agree between the owners and the collective representatives of the players among the teams to a bargaining agreement to allow them to play. If they are unable to reach an agreement like Bud Adams hopes then the NFL will not be paying players this season and will lose all of the revenue from the games that are not being played. The NFL will take a catastrophic hit while the owners continue to sit pretty and control their teams respectively.
Charlie Newton
The sports examples are great; imperfect information abounds! Plus, there are positive and negative spillover effects all over the place. We will try to address a few of these next week!
ReplyDeleteIn this article it states that Ireland is in a current economic crises due to home foreclosure's and defaulted loans from their housing market, just like the crisis of credit video shown in class. They are trying to get bailed out by the government and save their economy before it gets even worse.
ReplyDeletehttp://finance.yahoo.com/news/Ireland-Banks-need-euro24B-apf-1729888749.html?x=0
An example of market failure is the removal of several channels from the iPad app. Apple had imperfect information of the contract Time Warner has with major media companies. As a result these companies “claimed that the iPad app is a contract violation” and the channels were removed. This results in market failure for Apple because they will lose customers and money.
ReplyDeletehttp://mediadecoder.blogs.nytimes.com/2011/03/31/time-warner-pulls-channels-from-ipad-app/?ref=business
An example of market failure in the world right now is Google's current relationship and progress in china. For the past year, Google has maintained a struggle with China's Internet regulation policies and Google's free information views. This shows market failure by negative externalities that exist in China by not having unlimited information to citizens in China.
ReplyDeletehttp://online.wsj.com/article/SB10001424052748704530204576234693138486996.html?mod=WSJ_Tech_LEFTTopNews
Market failure reaches out to more than just the economy but it can also be seen in politics. I'm not really into politics but its pretty obvious that imperfect information and sometimes no information is present in politics. People voted for Barrack Obama on his promise that he would reform healthcare, change wall street laws, change immigration laws, and shut down guantanamo bay. he did the first two but he has yet to do anything about the second two. he gave us imperfect information which lead to us to ote for him. But he failed to follow through with all of his promises and we failed to vote for a president who would go through with all said promises. that is an example of market failure through imperfect information.
ReplyDeletehttp://news.yahoo.com/s/ap/20110404/ap_on_el_ge/us_obama2012
http://news.yahoo.com/s/yblog_thelookout/20110404/bs_yblog_thelookout/the-foreclosure-mess-isnt-going-away
ReplyDeleteYAHOO- The Foreclosure mess isnt going away
The housing failure is still resonating throughout the housing industry. People are still loosing their homes that they bought through sub-prime loans, all because of imperfect information given to them, and because banks need to sell homes to make money, they are causing negative externalities to those whose homes are depreciating.
http://www.signonsandiego.com/news/2011/apr/01/forbes-figures-padres-may-need-recalculation/
ReplyDeleteMy favorite sports team, the San Diego Padres were recently listed as Forbes' most profitable MLB team, which fueled a lot of anger within the San Diego community regarding the teams recent trade of their best/most popular player, Adrian Gonzalez. This has led to speculation that attendance may drop because the fans are upset and are accusing Padre owner Jeff Moorad of embezzling money. The truth is that the Forbes article posted statistics that didn't show the whole picture. The media, in this case, provides a huge negative externality that Moorad could not have been aware of before purchasing the Padres a couple years back but it may cost him some money this year if fans remain ignorant and upset.
http://arstechnica.com/tech-policy/news/2011/03/sprint-no-attt-mobile-no-way.ars
ReplyDeleteThe potential merger of Sprint and AT&T demonstrates market failure. Because Sprint depends on the AT&T network, if the merger between AT&T and T-Mobile takes place, a monopoly will be formed. Since sprint opposes this idea, if it takes place represents a failure. Sprints senior vice-president explains this problem as, bad for consumers. "It's bad for industry. It's bad for the country. It creates a huge duopoly. We don't see how it can fixed." They are trying to have the government ban this merger, in order to have this approved it needs to go through the Federal Communications Commission.
http://finance.yahoo.com/news/Drivers-start-to-cut-back-on-apf-3477801693.html?x=0
ReplyDeleteThe steady rise in gas prices, is a clear sign of market failure not only for the oil industry, but for the automotive as well. With high gas prices people are beginning to cut back on driving, which results in decrease in profit for oil companies, and less purchases of new vehichles. This will could slowly end in market failure for both markets if prices keep increasing.
Chaun Calvin
http://factoidz.com/healthcare-as-a-market-failure-why-public-policy-should-step-in/
ReplyDeleteAn example of market failure is the continuing argument about healthcare. The high prices of healthcare prevents everyone from having the ability to receive it. It is a public good because some people are using more than others which in turn makes it more expensive.
http://www.news10.net/news/story.aspx?storyid=126460&catid=2
ReplyDeleteThe fact that the Sacramento Kings are strongly considering leaving for Sacramento for Anaheim is an example of market failure. The combination of unsuccessful teams of the past few years and ticket prices that many people, in this economy, aren't willing to pay for to see a losing team has led to this. The 82 game schedule has caused for an abundant supply of games but the demand for a Kings ticket just isn't what it used to be in the late 1990's early 2000's when the team experienced a lot of success. As this article states it will also cause in a failure of other markets in Sacramento like the charities running the concession stands.
The Playstation network often has its shortcomings. It is free to anyone who has a playstation. Due to it being free, the Playstation company has no incentive to go all the way for the customer in terms of service and product. There is no information regarding their network that customers can access. There is a serious lack of information given to the customers.
ReplyDeletehttp://www.bbc.co.uk/news/technology-13169518