For most of Amazon’s history it made zero profit. That changed a couple years ago, but although its gross profit margin on revenues is now positive, it is still pretty negligible today. Amazon is a huge conglomerate these days, but…
Blog Archives
A history of the Corporation – Wonkish
There have always been large organizations that have done the kinds of things corporations sometimes do, but for most of human history, those organizations were were organized as religious hierarchies or governments rather than as for-profit businesses. Businesses were small…
Posted in Managerial Micro
The expected value of potential lives lost during atomic testing
Rob Reid wrote a great explanation of the horrible risk taken during the Manhattan Project, when American nuclear scientists took a chance estimated at one-in-three million that the first atomic test would create a chain reaction that would ignite the…
An airline “dent and scratch sale”
A classic story of price discrimination that textbooks tell is the appliance ‘dent and scratch’ sale in which an appliance store will deliberately create cosmetic damage on some of their washers and refrigerators so that they can sell them at…
Posted in Managerial Micro
VOX messed up: Amazon.com already has enormous monopoly power
Emily Stewart at Vox.com made a mistake about monopoly power in America. She wrote that Amazon… could eventually become so big that it can control what shipping companies such as FedEx and UPS charge it, and, in areas where it becomes…
Posted in Managerial Micro, Public Finance
Can stadium owners increase profits by imposing a price ceiling on their hot dog vendors?
How about these prices for food at NFL games: “$35 for a (large) cocktail? $19 for cheese curds? $18 for essentially a Doritos taco?” Although it is tempting to blame stadium owners for the high prices and bad quality, the…
Posted in Managerial Micro
Democratic corporate governance
Are corporations authoritarian or democratic? Corporations tend to be hierarchical institutions in which workers often feel like they are working within a communist dictatorship, but compared with privately-held companies, corporations are extremely democratic. A privately-held company can be owned by…
