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Essay / Research Paper Abstract
This 7 page paper answers numerous business economics and strategy related questions, defining and discussing aspects including asymmetrical information, dynamic capabilities, sunk costs, path dependency, antitrust policies, Porters Five forces and the impact of this internet on this model.
Page Count:
6 pages (~225 words per page)
File: TS14_TEquest2.rtf
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Unformatted sample text from the term paper:
life insurance the individual taking out the policy will have a greater level of information regarding their health, and therefore the possibility of them making a claim on a life
insurance policy than the company providing the insurance. The company may try an level the playing field by asking relevant questions to gain more information, even gaining a medical in
order to make a correct assessment. However, the idea of asymmetrical information leads to the potential for moral hazard. This is where one party will take advantage of the asymmetry
of information. In this case a potential policy holder may not declare the truth about their medical condition. We can see how, if this was repeated, and the checks did
not reveal any misdeeds, that this could lead to market failure, with the insurance companies unable to meet their obligations, or the costs of insurance becoming to high, or simply
too few companies will to participate in the market. This idea can be extended to all markets, form healthcare though to the stock market, it is asymmetric
information that is at the heart of insider dealing. (b) It is also asymmetrical information that can lead to a problem known as the holdup problem. In an contract
that is not compete, where specific assets are considered there is the possibility of holdup, however, it only arises after the contract is sigfned. This is where one party to
a contract needs specific assets to be used, and the other party knows that the cost of existing the contract is high they may seek to take advantage of
that position once the contract is signed, and there is a difficulty to exist. (c) If there is a scenario where specific assets cannot be protected by the direct
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