15.013  Industrial Economics for Strategic Decisions

Thank you for attending the final review session.  We made a couple of changes to the presentation:

• All formulas now appear on the screen.  The conversion from powerpoint 2007 to 2003 made some equations not appear.
• On slide 8, the option value graph assumes that there is an extraction cost of $50 per barrel
• On slide 12, the "holdup" sub-bullet point has graduated to become a full bullet point.
• On slide 20, the word "would" has been changed to "could" in the second bullet point.  This should read "An option is only valuable if the new information could change your current decision.
• On slide 34, there should be a negative sign in front of the fraction S1/E.  Unfortunately, we were unable to change that in powerpoint.

Note that all changes made are in red to remind you that that a change has been made.

We will be answering more of your questions tomorrow in E51-335 during 1-3pm.

Tomorrow is the last Industrial Economics class before the final.  Professor Schmalensee expects the lesson to be short so feel free to birng up any additional questions you have about the course.

We also announce that you can bring a cheat sheet to the final exam.  This will be one 8.5 x 11 sheet of paper, double sided with notes, etc.

Fiinally, congratulations for finishing the oligopoly game!  We are excited to discuss the results with you during our last class next week.

The final play of the oligopoly game is due today at 5pm.  Please submit ontime since we need to have a quick turnaround.  On the last day of class, we will reveal the identity of your competitors and discuss the game.

The final review session will be this Friday during 4-7 in E51-335.  We hope to post the review slides by the end of day Thursday so you can determine whether you would like to attend to the review session.  There will also be a Q&A session on Saturday during 1-3pm in E51-335. 

We have a several important announcements to make concerning the final, final review session, and more:

1. As you already know, there is an in-class final on Monday, December 8.   We have posted the 2006 and 2007 finals on Stellar.  (Before you ask for it, there are no answer keys available for either of these finals.)  Expect the format of this year’s final to be similar to the format of the finals posted.  Note that Professor Schmalensee has covered a slightly different set of topics this year than Professor Pindyck.  There will not be extensive mathematical calculations on the test.
2. The TAs will be holding a review session on Friday, December 5 during 4:00-7:00 (we don’t like the time of day either but that was the only time available).  We will also hold an additional Q&A session on Saturday, December 6 during 1:00-3:00 if you have additional questions or concerns after the review session.  Both events will take place in E51-335.
3. A few days ago, exercise 9 and its associated spreadsheet were posted on Stellar.  It is due the Monday after Thanksgiving weekend.  Part D of the homework requires you to play a short game against your partner.  If you do the homework alone, please find a classmate to work with on this section.  Let us know if you need help finding a partner.
4. Remember that you only need to hand in 8 out of 9 homeworks.  If you hand in all 9, we will drop the lowest grade.
5. Only two game plays left!  Please make sure you submit on-time by Monday at 5pm both weeks.
6. After class on Monday, I will be unreachable until we return from Thanksgiving weekend.   I will be attending a friend’s wedding abroad and should not have internet or phone access.  Estefania will run the game again next week and will cover next Wednesday’s class.  Please contact her if you have any questions while I am gone.  Thank you, Estefania!
   

Have a great Thanksgiving holiday.

Even though there is no class, the week 7 oligopoly game play is due on Monday 11/10 at 5pm.  Have a great weekend!  Thank you for your enthusiastic participation in Wednesday's class.