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This chapter shows how the firm can use marketing-finance fusion to choose bundling strategies to increase its performance. Topics covered include: how to price interdependent products, how and when to use cross-couponing strategies, how to allow for production capacity constraints, and how to reward managers of multidivisional firms when cross-couponing strategies are used. It analyzes why many bundling strategies fail in the marketplace; in addition, it proposes new metrics for measuring consumers' willingness to pay for products and bundles.

This chapter discusses what many infrastructure industries have in common — economies of scale or scope — and how this poses some significant policy challenges for successful trade policy reform. These conditions can lead to natural monopoly. The problem is that the single producer may abuse its monopoly power by restricting the quantity or quality of output and pricing above costs. Opening this market to trade creates opportunity for alternative suppliers but also creates challenges of arranging the transition to a new provider and regulating them appropriately. The chapter discusses how international trade negotiations can contribute to ensuring successful outcomes. The key messages are that while natural monopoly is a common feature of the infrastructure sector, care should be taken not to exaggerate its importance. There are circumstances in which no policy problem arises. Further, even if there is an apparent natural monopoly, it is important to separate that part of the chain of supply from other elements in which competition can develop. Even so, natural monopoly elements remain. The GATS is relevant to natural monopoly markets and contains some disciplines on policy in those markets. Trade-policy reform can contribute to performance in markets in which natural monopolies have some influence. However, market opening has to be complemented by the appropriate regulatory structures to capture these benefits, for example, related to the terms on which competitive firms have access to bottleneck facilities. Commitments made through international trade negotiations can facilitate the necessary regulatory reform.

This chapter examines the conditions under which the multiproduct firm should use market share as a metric for resource allocation. It distinguishes short- and long-run effects, analyze the effects of competition, and show how the discount rate affects the firm's revenue- and volume-based market shares. In particular, it shows how the firm can use marketing-finance fusion to choose the optimal performance metrics for managers so that they focus on maximizing long-run performance.

Chapter 6 documents the role of arbitrage networks on the operation of bimetallism. Focusing on the experience of the Rothschilds, its shows how bankers organized themselves in order to take advantage of the profits associated with bullion arbitrage. The response involved a combination of concentration (of refining and coining activities), and decentralization (of partners and associates all over the world to put bullion into motion).

This chapter uses the economic concept of externalities to evaluate the positive spillovers that exist in health interventions. It argues for mainstreaming AIDS prevention by addressing a broad array of development problems, rather than by employing a just-in-time approach to HIV intervention. It demonstrates that non-health investments are often the best way to achieve health goals, such as increasing the efficiency of customs regulations at border posts to reduce the spread of HIV along trucking routes. It also argues for broad community health programs that exploit economies of scale and scope.

This chapter explores the bundle of services on offer at most colleges and universities. There are sound economic and historical reasons for why the bundle includes most of its items, and for why the bundle is so similar across institutions. This chapter divides the bundle into three separate categories by how close they are to the educational mission. The primary services include teaching, research, and the support services they need. The secondary bundle includes room and board, and other services provided to undergraduates. The tertiary bundle includes things that enhance campus life but that are even less directly connected to the primary mission of educating, retaining, and ultimately graduating students, such as intercollegiate athletics.

The concept of efficiency involves measuring the current practice against the maximum potential for a given technology. This chapter addresses the intertemporal measurement of economic growth and performance at the firm level, the dynamic generalizations of the economies of scale and scope, and capacity utilization in the context of the directional distance technology dynamic adjustment. These concepts serve as the foundation to characterizing the Luenberger total productivity indicator and its change at the firm level. The decomposition of the Luenberger total productivity change indicator is developed into the contribution of technical inefficiency change, scale inefficiency change, and technical change. Each of these components is impacted by different policy remedies.

This chapter demonstrates that not only has the production landscape changed, but that the entire innovation landscape has been transformed as well. Globalization means that innovation in goods and services is now fragmented into four stages, ranging from invention of novel gadgets and technologies to new ways to assemble finished products. Each of these stages necessitates a different local ecosystem of innovation-based growth, and success in each of these leads to very different social outcomes. The chapter introduces the basic thought concepts to be used throughout the book, organizing a narrative for the reader. This will allow readers to let go of their existing (and wrong) “taken-for-granted story” of how the world works, so they can develop a radically new understanding of innovation and local economic growth under globalization.