MICRO

ECONOMICS
CASE
STUDY GROUP MEMBERS
ABHISHEK-02
GROUP-4 ANANDHU SUKUMARAN-09
ASWIN ANILKUMAR-12
K CHANDHU KRISHNAN-24
M E E R A J AYA K U M A R - 3 0
MEGHNA B RAJ- 31
S A N D R A D E VA S I A - 4 0
MADHUMITHA B- 63
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 WORK AND LIFE:The End of the
Zero-Sum Game

By Stewart D.Friedman, Perry Christensen,

and Jessica DeGroot

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 ABOUT THE AUTHORS

Stewart D Friedman

He is the director of the leadership program and the

Work/life integration project at the University of
Pennsylvania’s Wharton school in Philadelphia.
He worked for five years in the mental health field
Before learning his PhD from the University of
Michigan.

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 Perry Christensen

He is the former director of human resource

Strategy and and planning at Merck & Company

, is now with WFD Consulting in Boston,

Massachusetts.Dr. Christensen's educational

background is as diverse as his teaching ability.

He earned a minor in Modern Hebrew and a B.A.

in Russian from the University of Utah ('89)

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 Jessica DeGroot
She is the founder and executive director of the Third Path,

a nonprofit agency based in Philadelphia focused on the

integration of work and personal life. Starting with

“shared care,” Jessica, with the help of her staff,

developed a variety of resources for parents

interested in sharing in the care of their children while

also both earning an income

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 INTRODUCTION
WORK AND LIFE:Zero Sum Game
 Work and life are the 2 faces of a coin which are both interrelated.
 “What you do in the office is our business. What you do outside is your
own.”
 This was the stereotypical behavior of managers in the past.
 Work versus personal life, after all, was a zero-sum game
 Increasing number of women in the workforce, have put more mothers
on the job, heightening awareness of work.
 New economic forces, such as global competition, have also changed
the landscape, creating an unprecedented need for committed
employees

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 UNDER THE RADAR
 Which means

“In a position in which someone or something will remain unnoticed or
 undetected.”
 Some of the managers operate under the assumption that work and

personal life are not competing priorities but complementary ones.

 In the cases we have studied, the new approach has yielded tangible

payoffs both for organizations and for individual employees.

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  In the case the managers are guided by three mutually reinforcing

principles to deal with work and life simultaneously.

 First, they clarify what is important.

That is, they clearly inform their employees about business priorities
 Second, these managers recognize and support their employees as

“whole people” open-mindedly acknowledging and even celebrating the

fact that they have roles outside the office
 Third, these managers continually experiment with the way work is

done.

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 CLARIFY WHAT’S IMPORTANT
• Managers who wants to work life balance with their people
1. Make business objectives crystal clear
2. Employees to identify the important goals, concerns and
demands outside the office that require time and energy

• Challenges
1. Discussion of priorities can take place only in an environment of
trust
2. Managers must be aware of the personal life of the people

• Duties of manager
1. Managers do not penalize for putting personal concerns first
2. Do not try to persuade people to give up their extracurricular
interest
3. Use information about personal priorities to draw a roadmap
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toward singular destination
 EXAMPLE:
Steve, a senior operations executive at Global bank was a classic hard-driving
boss, starting the day with 7a.m. breakfasts with his staff. He also expected his
top people to work as late as he did – sometimes close to 10p.m.
Jim, vice president at Global bank played by Steve’s rules
Jim’s son fell and cut his knee and refused to comfort him.
Realized he had let slip of single most priority in his life- close relationship
with his son
Jim demands Steve to judge him by quality of his work, not by amount of time
spend on office
He was able to pay unrelating attention to key business issues while at work
which increased his efficiency and performance which was appreciated by
giving promotions
Jim currently working as C.E.O of a major manufacturing company quotes “
clarifying what’s important has become a fundamental part of his managerial
style”.

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 RECOGNIZE AND SUPPORT THE
WHOLE PERSON
 Managers recognize and support their employees as “whole person”,
open mindedly acknowledging and support the skills and knowledge of
employees lives outside the work.
 Managers know their employee’s personal lives and aware of their
hobbies or community activities.
 Managers must tune into their employee’s role outside office
-Provide motivation and cultural care.
-To create a bond and trust.
-Identify the range of employee’s talent.
-Establish effective boundaries.
 Managers demonstrates their commitment to employees by acting as a
role model.

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 EXAMPLE:
Jose is a company manager and Sally was his key sales representative. She was
dedicated to her alma mater, Big Ten University. She was active fund raiser for
the college and recruit students.
Jose impressed with Sally’s knowledge and commitment offered her position
of company’s liaison to improve its reputation with campus and recruit
students for sales force.
Sally replace another sales rep who has no personal ties to college and Jose
agreed Sally’s proposal to increase the organizational ability.
Jose anticipated that Sally will do great job and relationship with the college
helps company’s recruiting effort.
Sally’s loss of time will be minimum with customers as she spends time to
have business value with college.
Sally will combine her interest in the school with her work on company
After Sally received the liaison position and her commitment increased thus
benefiting company.

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 CONTINUALLY
EXPERIMENT WITH THE
WAY WORK IS DONE
• Managers who embrace this principle see experimenting with work
processes as an exciting opportunity to improve organizational
performance and lives of people.
• Taking new set of parameters into account can allow people to
question ways of doing business.
• Encourage employees to learn through trial and error and also about
new ways to organise work that might well challenge existing
practices.
• Newer telecommunication tools such as email, voice mail,
teleconferencing can create greater flexibility. They determine how,
where, when and with whom work is accomplished.

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 EXAMPLE:
• Hallie is a manager who meets both the business demands and employee
personal needs.
• She had hired an older employee of the company named Sarah.
• Hallie was told by other employees that Sarah had a bad attitude.
• At first meeting with Sarah, Hallie came to know that Sarah was not
permitted to do finance work because of her inexperience with computers.
• She also had an ailing mother who must be looked upon.
• After Hallie had learned about Sarah, they both identified inefficiencies in
department’s work processes.
• Knowing Sarah’s interest, Hallie arranged for her to be trained in new
Excel budgetary systems and in basic analytical processes.
• Her performance improved and thereby her morale increased too.
• Working on a computer made it easier for her to balance work and life.

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 COMBINING THREE PRINCIPLES
OF WORK-LIFE BALANCE
Getting beyond the status quo
• Deals with manager of an accounting firm who used principles to put the issues on
the radar screen.
• During her work days she came across a pamphlet that discussed company’s policy
on alternative work schedules.
• She had a keen interest on writing and hoped that pamphlet provided a schedule
that could balance her work and personal interests.
• But none of them came close to by her needs.
• She approached Harry, the HR Manager.
• He expressed his willingness to work with Jane to craft a solution that could
balance both.
• They chartered out suitable measures to balance work and life.
• She doubted how realistic it was.
• Chartered a second plan.
• By this plan, she became efficient in her work.

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 CONCLUSION
• There must a balance between the work and life.
• Many companies are using integrated approach in which employee
and manager work together to find ways to meet both life and
employee needs.
• There comes a leveraged approach in which practices used to strike
work-life balance actually add value to the business.
• There must be a balance in work and life for a better performance and
morale.

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 SALES MECHANISMS IN ONLINE MARKETS:
WHAT HAPPENED TO INTERNET
AUCTIONS?

Liran Einav, Chiara Farronato,

Jonathan D. Levin, Neel Sundaresan

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 ABOUT THE AUTHORS

LIRAN EINAV
• Stanford University
• Department of Economics
• Research associate in NBER

JONATHAN D. LEVIN
• Stanford University
• Department of Economics

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 ABOUT THE AUTHORS

CHIARA FARRONATO
• Stanford University
• Department of Economics

NEEL SUNDARESAN
• Head of eBay Research Labs and
eBay Data Labs.

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 INTRODUCTION
• Auctions are a well known market mechanism.

• An Internet or online auction can be viewed and discussed from a

number of perspectives.

• The best example is eBay, which by 2001 had become a dominant

platform for consumer auctions, and was the third-ranked web site in
terms of time spent by consumers.

PURPOSE OF STUDY:
 The purpose of this paper is to describe a prototype of an online
auction and how the shift towards posted price took place.

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 WHAT IS THE CASE STUDY ABOUT?

• This paper relates to a theoretical literature on the choice between

auctions and posted prices.

MOTIVATION TO DO WORK

• The Internet has dramatically changed how people sell and buy goods.
• Ten years ago, internet auctions were a form of online entertainment.
• Finally, the price discovery benefits of auctions have declined over time.

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 APPROACH OF THE STUDY
 Based on the hypothesis of the study,
 H1:shift in buyer’s demand away from auctions.
 H2:narrowing of seller margins that favors posted prices.

• Developed a parsimonous model , explains the choice between sales

mechanisms
• It includes few parameters that captures how changes in buyer demand,
or changes in competition that give rise to changes in residual demand,
that affect the choice of sales mechanism

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  Collected and compared large data of matched listings from 2003
-2009.
 The seller’s problem is to choose a sales mechanism, and either a
posted price or a reserve price.
 The Figure illustrates the difference between the two sale mechanism.
 The black line shows the posted price demand curve, i.e. for any price
p, the probability of sale is QF (p). The grey line shows the auction
demand curve.
 The idea that sellers engage alternative strategies because they
consider the profit-maximizing incentives.
 A profit-maximizing seller will want to choose a point on the upper
envelope of the demand curves.

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  The posted price demand curve is steeper than the auction demand
curve.
The auction uniformly reduces the willingness to pay of all buyers
including those with the highest value, but it also creates competition
that increases the final price above the reserve price. The second effect
is largest for low reserve prices (or high sale probability

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  The model gives rise to predictions like all else equal, a higher level of
“c”(cost) pushes the seller toward a posted price.
 lower buyer value which is relative to the next best alternative also
pushes the seller toward a posted price.
 The higher level of transaction cost also pushes the seller toward a
posted price by directly making auctions less attractive.
 comparing auction and posted price listings of a given item, it address
two measurement issues.
 First, the typical posted price listing lasts for up to 30 days. In contrast,
the typical auction lasts one week.
 Second, posted price listings can allow for the sale of multiple units
and multi –unit listings.
 Players in market,change in consumers buying behaviour and
avaliability of wide range of products leads to posted price.That leads
to change in shift in buyers demand in auctions.

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 KEY FINDINGS IN THE
RESEARCH
1) Shift of sellers towards posted price:
 Business sellers are more likely to use posted prices than occasional
sellers.

 In posted prices 65% are business sellers while 13% are occasional
sellers.

 For selling the items at high price sellers use the fixed price while the
auctions are used only to achieve the high probability.

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 Posted price use of sellers

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 2)Shift of buyers towards posted price

 In e-commerce professional buyers purchase 100 times in a year while

occasional buyers purchase less than 5 times in a year.

 Professional buyers are of 1% while occasional buyers are of 60%.

 Due to less experience in auction, the occasional buyers go for posted

price.

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 Posted price use of buyers

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 MICROECONOMIC
PHENOMENON
• Changing Tastes & preferences:
 Demand is an economic principle referring to a consumer's desire to
purchase goods and services and willingness to pay a price for a
specific good or service.
 A change in what we like, enjoy or value.

• Changing income:
 It affects our ability to pay for goods and services.

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 • Open outcry English auction:

 An auction is usually a process of buying and selling of goods or services

by offering them up for bid
 Open outcry English auctions, Open outcry Dutch auctions, Sealed bid
first price auction & Sealed bid second price auction
 Here price increases until there is only one standing bid

• Tradeoff:

 Trade off is an exchange where you give up one thing in order to get
something else that you also desire.

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 OUR TAKE FROM THE CASE
 From the case as well as by some researches, we understand that

popularity of internet auction is diminishing

 Sniping—the practice of placing winning bids at the last second

 New bidders don’t understand or expect sniping, so when it happens,

people leave in frustration

 In the early days of eBay, there were fewer and less experienced

bidders. So it was more likely that the real value of an object might be
overlooked
 As shoppers became more sophisticated and informed, the chance that

multiple people would recognize an object’s real value grew as well.

This made prices more accurate
32  Growing technology
 • Considering the way the paper had been presented, we do agree with the

author’s conclusions
• They have done their research based on the e commerce site eBay during

the period of 2003-2009

• Their findings prove to be genuine as they have mentioned that they

would require data that they currently don't have

• Further scope for future research

• The online sales mechanism have a very much impact on our lives

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 CONCLUSION
• Decline in the relative demand for auctions

• Decline in auctions, especially for more idiosyncratic item categories

• Gradual seller learning

• Increased use of smart phones by eBay users

• Preset rates were more efficient and that auctions were more

complicated

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 REFERENCE
• https://leinav.people.stanford.edu/bio

• https://www.journals.uchicago.edu/doi/abs/10.1086/695529

• https://en.wikipedia.org/wiki/Auction

• https://www.google.co.in/amp/s/hbr.org/amp/1998/11/work-and-life-th

e-end-of-the-zero-sum-game
• https://pubmed.ncbi.nlm.nih.gov/10187242/

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