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Cocktail Party Economics: A Case Study

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Over the past couple of weeks, there has been a dramatic fall in the once thought of, cooperate social responsible car company Volkswagen. After manipulating the pollution levels of their cars, this scandal has resulted in the German car company is facing a lot of backlash from consumers which is significantly impacting their value. This made me think of chapter two of Cocktail Party Economics as it is all about value.

Firstly, we are introduced to the idea that nothing is truly priceless even though companies try and convince us that they are. Volkswagen through catchy advertising, amazing corporate social responsibly (CSR) and environmentally friendly vehicles has built a reputation that some people would value as priceless. Especially in …show more content…

On page 25 of Cocktail Party Economics it is explained how sports teams and players are valued. “Each team or company that employs these stars has a maximum price it is willing to pay them depending on how much it estimates the players will generate in revenue for the franchise or company” (p25) It is all about what you bring to the table. The stars talent decides their price or value. In Volkswagens case, what they brought to the table was fuel efficiency, environmentally friendly, and a responsible company, but what happens when your value is compromised? “If you have a bad season, you will be re-evaluated, so make sure to play well and not get injured. If you need a clean-cut image to be worth something in endorsements, don’t commit martial infidelity. Notice that I didn’t say don’t get caught. If you are a star, you will get caught! As Tiger Woods found out, your downfall has value in other entertainment markets, most notably the gossip tabloids.” (p25) Volkswagen, much like an athlete who has had a bad season, will be re-evaluated. Their clean-cut image of being a socially responsible company has now been tarnished much like Tiger woods when he committed marital infidelity. Tiger woods was the star of the golf world, just like how Volkswagen was the star of the car world, which is why it was just a matter of time before they were caught. This is why the value of Volkswagen cars will dramatically

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Large-market teams like the Yankees seem to suffer each year. “ Since this Luxury Tax system was put in place in 2002, the Yankees have broken the ceiling every year it’s been in place” (Brown). They invest in the best players in the league while they are in their prime. They get huge contracts and are expected to do great, but near the end of their contracts they begin to slack and the Yankees are stuck paying them still. Smaller-market teams invest in youth, helping to develop them as players.

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Here is the economic structure of the NFL. “ Over the last half-century the National Football League (NFL) has become the most economically powerful sports league in the world largely because it has also been the most egalitarian. In 2010 NFL clubs pooled and shared two-thirds of over $8 billion in revenues among 32 franchises.” “Over the past decade, NFL owners have, on average, done very well financially, and they have continued to do well since the 2006 extension of the current Collective Bargaining Agreement (CBA).2 • Team values have nearly quadrupled since 1998: the average NFL team is now worth more than $1 billion. “ The NFL owners reluctantly agreed to the current CBA in large part to preserve a salary cap.

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Hens Night Party Ideas In case you're going to get hitched you're certain to need to praise the end of being single however discovering unique hens night thoughts as opposed to simply going out for a couple beverages isn't that simple. Before you get to the gathering or occasion, there are a few things you have to choose: Number 1 - How far before the wedding do you need your hen or bucks night party? Too close to the wedding won't give you an opportunity to get over the aftereffect and/or undesirable shaving, hair kicking the bucket or splash tanning. Too far before the wedding and the significance of the occasion will be somewhat lost so most likely maybe a couple weeks before the wedding will be about right.

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Why Professional Athletes Go Broke? Young athlete’s main goal to attain is to become a professional athlete. Many want to become a professional athlete due to the money, others for the love of the particular sport that they are interested in. There is a downside in becoming a professional athlete, that many young players are not aware of.

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As much of the book speaks of the tremendous effect for independence on society, it also suggests that the automobile has become over depended on. The authors argue that the automobile industry needs to call for higher standards, to stop and not just slow down, global warming and car induced tragedies, the harmful consequences of America’s car culture. Mom, G. (2015). Chapter 4: "Why Apologize for Pleasure?" Consuming the Car in Boom and Bust.

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This downside is that professional athletes’ go broke faster than they are drafted into the leagues. Many professional players such as NBA and NFL players go broke due to career duration, overspending, family issues, and lack of financial knowledge. When trying to become a professional athlete, one must start playing sports as early as possible (Ferguson 34).Playing sports comes with many sacrifices. Athletes must commit time to practice and traveling. Moreover, they must spend money on equipment, clothing, and food (37).

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Professional athletes get paid an excessive amount of money to play a sport and contribute small things. These sports aren’t even played for that long during the year. These athletes shouldn’t get paid millions to play a game while people are getting paid nowhere near that and are working a harder job. “Playing games for a living isn't worth those million-dollar

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People know that doctors and firefighters save lives, while athletes play a game to make money. Even teachers pay isn’t anywhere near to athletes; they educate the generation’s youth so they can make a difference in the future. So many jobs that are very important don’t get paid as much and that money can go towards better causes. But these are only some of the reasons that pro athletes get paid too much.

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Sanderson and Siegfried supported the work of Rodney Fort highlighting the necessity of having an uncertain league and maintaining the highest level of competitive balance in order to preserve the fans interest, since consumers are not interested to attend games in which the results can be easily determined beforehand. Recently, Berri and Schmidt (2004) found out that the NBA has a very low level of competitive balance and it has the lowest level of it out of the major sport leagues. This result will be supported by the findings of this paper too. The effect of the introduction of the salary cap on the competitive has been investigated by Kesenne (2000) who, using a simple model based on two teams, concluded that the CB is positively affected but owners have to overspend on talent by raising the contracts of the players. Zimbalist (2010) instead, focused his attention on the collective Bargaining Agreement, considering the NFL hard cap as the model to follow to sustain the competitive balance, but he believed that the NBA’s soft cap system has the power to overcome some of the CB problems, but he wasn’t able to support his

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Mercedes is known by the market for producing safe cars which have the latest technology. Mercedes is also famous for manufacturing environmentally friendly cars. The motivation, product differentiation and the comparative advantage theories have explained the strategies and reasons for success for Mercedes. It is important for the automakers to embrace new market trends in order to ensure that it enjoy profitability in the long run. This will ensure that the needs of all market segments are addressed by the

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