Shared Flashcard Set

Details

BSAD132
Biz Policy
65
Business
Undergraduate 1
12/11/2008

Additional Business Flashcards

 


 

Cards

Term
Wilson-Lowi Matrix
Definition

Interest Group Politics: if harm and benefit are concentrated

Majoritarian Politics: when harm and benefit are both widely distributed

Client Politics: when benefits are concentrated and harm is widely distributed

Entrepreneurial Politics: benefits are widely distributed and harm is concentrated

Term
Four I's
Definition

Issues: basis unit of analysis

Interests: groups or individuals with a stake in the  issue

Institutions: government and nongovt institutions where issues are addressed

Information: what parties know or believe about issues

Term
Issue Life Cycle
Definition

Issue Identification

Interest Group Formation

Legislation

Administration

Enforcement

Term
Condorcet Paradox
Definition

-Majority rule is incapable.

-Each alternative defeated by another.

Term
Arrow's Impossibility Theorem
Definition

-way to vote strategically

-expands paradox from elections into policy -determine what's best based upon ordered preferences

Term
Prisoner's Dilemma
Definition
What is individually rational is not collectively rational
Term
Benefits of NMA
Definition

-Aggregate

-Per Capita

-Substitutes

Term
Costs of NMA
Definition

-Organizing Costs

-Direct Costs

-Effectiveness

Term
Generic Nonmarket Strategies
Definition

-Representational

-Majority Building

-Informational

Term
Social policies of Anti-Trust Laws
Definition

-concern for concentrations of economic power & abuse of the power

-check and balance for power

Term
Economic policies of Anti-Trust Laws
Definition

-protects competition

-concerned with market structure, conduct of participants, and market performance

Term
Treble Damages
Definition

-receive 3x the amount of damages

-encourage people to bring light on bad acts

-deter people from committing bad acts

Term
Sherman Act
Definition

Section1: no conspiring between businesses

-targets price fixing as price is essential

Section2: no monopolization

-"Big is bad"

-questions to ask

  1. Firm affect market price?
  2. Geographic market?
  3. Product?
  4. Legal market share? (no pred. pricing)

 

 

Term
Clayton Act
Definition
-expands on Sherman Act
-bans price discrimination
-bans tying products
-bans mergers that hurt competition
-triple damages
Term
FTC Act
Definition

-prevent unfair competition

-established independent regulatory agency

Term
Robinson Patman Act
Definition

-prohibits price discrimination

-exceptions

  1. Cost justified
  2. Match competition

 

Term
Horizontal Practices
Definition

-always a violation (per se)

-focuses on attempts by companies fo fix prices on same product

-ex: retailer to retailer

 

 

Term
Vertical Practices
Definition
-producers of good used in different parts of production process
-ex: manufacturers try to get retailers to sell at specific prices.
Term
Per Se Violation
Definition
-agreements or practices that are damaging to competition with no redeeming qualities
-always fail the rule of reason
-two ways to defend
  1. Didn't commit the act.
  2. It wasn't unreasonable to commit the act.
Term
Natural Monopoly
Definition
-high fixed costs
-high barriers to entry
-huge economies of scale
-no substitutes
Term
Cross Subsidization
Definition
-one group of customers pays more and another group pays less than the cost of their service
Term
Rent Seeking
Definition

-occurs when an individual, organization or firm seeks to make money by manipulating the economic and/or legal environment rather than by trade and production of wealth

-regulation not created for market imperfections

 

Term
Capture Theory
Definition
  • occurs when politicians, who are supposed to be acting in the public interest, act systematically to favor particular vested interests
  • this is inevitable because vested interests have concentrated financial stake in the outcomes of political decisions, thus ensuring that they will find means—direct or indirect—to capture decision makers
Term
Strict Liability for Product Injuries
Definition
  • plaintiff has to show producer was at fault
  • matter of state law
  • manufacturer has best idea of how dangerous their products really are
Term
Assumption of Risk
Definition
  • with the right percautions the consumer assumes risk
  • if manufacturer is at fault they assume risk

Term
Insurance Theory (Product Liability)
Definition
  • producer is best position to calculate social harm
  • increase price to save money for law suits
  • producer is held responsible for injuries
Term
Product Liability & Social Efficiency
Definition
  • efficiency requires balancing injury and costs
  • society tolerates some injuries because preventing them would cost too much
Term
Least-Cost Avoider
Definition
  • efficiency requires care by producer, consumer, or both
  • higher prices due to liability cash = reduced injuries
  • products purchased by those who value product
Term
Entitlements (Property & Liability)
Definition
  • Property: can't infringe without consent of holding party
  • Liability: can infringe but must compensate owner for loss associated with infringement
Term
Coase Theorem
Definition
  • best social outcome whether you use property, liability, or abatement rules
  • assign cost of protection to most efficient solution
  • Ex: Swimming pools and fences.
Term
Calabresi and Melamed Principles
Definition
  • Principles
  1. Assign entitlements based on knowledgeable choices about transactions costs
  2. Assign costs to party best able to make benefit-cost analysis
  3. Assign costs to party who can most efficiently reduce them
  • Result: manufacturer usually responsible
Term
"Command & Control" Regulation
Definition
  • the order and enforcement of uniform rules or standards
  • can cause inefficency and administrative nightmares because ignores abatement costs
  • can be used to help force the development of new technologies
Term
"Market Incentive" Regulation
Definition
  • gives company control over how to meet the order rather than specific controls
  • ex: credits and offsets
Term
Appropriability of Intellectual Property
Definition
  • ability to cash in
  • property is central provides incentives to contribute
  • determined by
  1. how easy to replicate discovery
  2. strength of public protection from discovery
Term
Patents, Copyright, Trademarks, Trade Secrets
Definition
  • Patents: balance of reward and social benefit, 20 years
  • Copyrights: original expression, life of author + 70 years
  • Trademarks: provides social and private value
Term
Structured Pluralism
Definition
Term
Parliamentary System (Diet)
Definition
  • aligned executive and legislative powers
  • Two unequally powered houses
  1. House of Reps: elects prime minister and has most power
  2. House of Councillors: blocks legislation unless overriden 2/3 vote by reps
  • Prime Minister: represents goverment convenes the cabinet
Term
Japan's Ministries (Guidance): Setup
Definition
  • Headed by a politician
  • Two vice ministers
  1. Parliamentary Minister
  2. Administrative Vice Minister
Term
Japan's Ministries (Guidance): Ministries
Definition
  • Ministry of Finance
  • Ministry of Economy Trade and Industry
  • Posts and Telecommunications Ministry
  • Construction Ministry
Term
Japan's Ministries (Guidance): Directives
Definition
  • expertise in resolving problems and devising effective policies
  • ability to direct resources through regulation
  • policies hard to understand by foreign business
Term
EU Governance Structure
Definition
  • European Commission: executive and administrative body
  • Council of Ministers: legislative body (Regulations/Directives/Decisions/Recomm.)
  • European Parliament: democratic supervision powers
  • European Court of Justice: overturn decisions that conflict with EU treaties
Term
Co-Decision
Definition
  • gives the European Parliament the power to adopt legislation jointly with the Council of the European Union, requiring the two bodies to agree on an identical text before any proposal can become law.
Term
Corporatist Structure
Definition
  • feature of EU and Japanese where invite special interest groups to have say in policy making
  • formal government sanction
Term
Strategic Trade
Definition
  • product of a country's decision
  • improve industry against rest of world
  • conflicts with comparative advantage
Term
Managed Trade
Definition
  • happens between two governments
  • agree to restrict trade
Term
Smoot-Hawley Tariff
Definition
  • US passed this protectionist measure during the depression
Term
Marshall Plan
Definition
  • US plunked billions into Europe
  • Political driver
Term
Comparative Advantage After WWI
Definition
  • economic driver for market economies
Term
World Bank
Definition
  • designed to rebuild Europe
  • used for 3rd world infrastructure and poverty
  • US largest shareholder so get to pick president
Term
International Monetary Fund (IMF)
Definition
  • responsible for short-term currency crisis
  • dictates domestic policy
Term
International Trade Organization (ITO)
Definition
  • set up rules to govern international trade
  • US refused
  • GATT: an agreement NOT a treaty!
  • Treaty needs 2/3 of senate while agreement only needs president
Term
Benefits & Costs of Increasing Numbers of Market Economies
Definition
  • Benefits: Peace, Prosperity
  • Costs: Limited Sovereignty, Income Redistribution, Culture Change
Term
World Trade Organization (WTO) Rules
Definition
  • Most favored nation (MFN): everyone else gets same deal
  • National Treatment: national goods don't get different treatment
  • Anti-Dumping: below cost or home-market price
Term
Prisoners' Dilemma (International Trade)
Definition
  • each country has incentive to subsidize local businesses
  • solved by free trade treaties
Term
US Trade Act of 1974: Section 201
Definition
  • Escape Clause = Injury Relief
  • Tariffs are allowed to be temp relief
  • Conditions: applied equally, temp, offset by reductions
  • reflects political realism
Term
US Trade Act of 1974: Section 301
Definition
  • Super 301 - politically motivated
  • a trade policy to force negotations
  • retaliate against any country with closed markets
Term
Aysmmetrical Politics of International Trade
Definition
  • due to sunk costs and rent on resources
  • creates short termi incentive to protect local markets
Term
Corporate Social Responsiveness
Definition
  • responding to outside pressures
  • not willing making a decision
Term
Corporate Social Responsibility
Definition
  • done under a more moral based approach
Term
Socially Responsible Performance
Definition
  • direct correlation with corporate financial performance
  • takes into the interest of the shareholders beyond the markets or the law
Term
Friedman CSR
Definition
  • prefers strategic CSR
  • any other forms distract from the purpose of the firm
Term
Lankova CSR
Definition
  • businesses best position to be part of the solution
  • have an ethical duty
Term
Strategic CSR
Definition
  • Friedman approved
  • Done to increase profits and firm value
Term
Managerial Capitalism
Definition
  • reliance on managers for allocation of resources
  • occurs because managers have discretion in options they persue
Term
Corporate Control (Market)
Definition
  • market will remove inadequate managers
  • stockholders might remove philanthrapist
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