439 Law, Economics & Statistics Spring 2015

Economics 439 Law, Economics & Statistics Spring 2015 Prof. Kathie Barnes Midterm Take-Home Exam Please note that the Honor Code applies to this exam €“ Do NOT discuss the exam, work with others or obtain help from others in completing this exam question. 1. LCD Monitor Anti-trust case The Department oqustice (Do)) is investigating HP for conspiring with LCD monitor manufacturers to artificially raise the price of monitors that they sell with desktop computers. They have strong evidence that the conspiracy started in August 2005, and ended in January 2007. They are trying to find the total amount that HP was able to overcharge during this time period. The DO] has data on the total sales (in thousands of dollars) of monitors for each month between January 2005 and December 2007 for both HP, and Acer, which was not a part ofthe conspiracy. A. Create a measure of how much the HP overcharged (in total) per month during the conspiracy. Explain any assumptions you are making. You may want to take into account the following: a. Sales of monitors are traditionally higher in August & September for the start of school, and in December because of Christmas. b. All computer companies have seen their sale of desktop computers drop over time as more and more consumers choose laptop computers (which do not have LCD monitors). B. Provide an estimate of the total amount HP overcharged consumers during the entire 18 month conspiracy. C. Provide a 95% confidence interval as bounds for your total found in part B. Remember to EXPLAIN what you are doing, and why. Email your final answer to me at: kbarnes@email.arizona.edu by 5pm MST (Tucson Time) Friday. Ifyou are unable to email me your answer, you can drop it off at Law Rm 210 (faculty assistants) until 5pm. Note that the second floor of the law school locks automatically at 5pm sharp, so you can’t be late! Include in your answer all calculations you made, either by attaching the excel spreadsheet (or log file for Stata) to the email, or printing it out.

Month    Seller    Total_Sales        Month    Seller    Total_Sales

Jan-2005    HP    290824        Jan-2005    Acer    335314

Feb-2005    HP    322059        Feb-2005    Acer    330075

Mar-2005    HP    294593        Mar-2005    Acer    319450

Apr-2005    HP    299633        Apr-2005    Acer    315772

May-2005    HP    272018        May-2005    Acer    305127

Jun-2005    HP    281315        Jun-2005    Acer    324702

Jul-2005    HP    280747        Jul-2005    Acer    311380

Aug-2005    HP    458142        Aug-2005    Acer    381264

Sep-2005    HP    375035        Sep-2005    Acer    334663

Oct-2005    HP    309355        Oct-2005    Acer    305822

Nov-2005    HP    327711        Nov-2005    Acer    287949

Dec-2005    HP    456506        Dec-2005    Acer    347807

Jan-2006    HP    317482        Jan-2006    Acer    303182

Feb-2006    HP    328067        Feb-2006    Acer    292840

Mar-2006    HP    321012        Mar-2006    Acer    301249

Apr-2006    HP    326483        Apr-2006    Acer    275076

May-2006    HP    316931        May-2006    Acer    265413

Jun-2006    HP    289260        Jun-2006    Acer    265582

Jul-2006    HP    309149        Jul-2006    Acer    286118

Aug-2006    HP    420157        Aug-2006    Acer    328732

Sep-2006    HP    345702        Sep-2006    Acer    291343

Oct-2006    HP    298486        Oct-2006    Acer    278983

Nov-2006    HP    286682        Nov-2006    Acer    264530

Dec-2006    HP    389410        Dec-2006    Acer    319120

Jan-2007    HP    280358        Jan-2007    Acer    259740

Feb-2007    HP    251234        Feb-2007    Acer    254084

Mar-2007    HP    235999        Mar-2007    Acer    271715

Apr-2007    HP    239748        Apr-2007    Acer    262205

May-2007    HP    240845        May-2007    Acer    246004

Jun-2007    HP    231578        Jun-2007    Acer    253979

Jul-2007    HP    250427        Jul-2007    Acer    242102

Aug-2007    HP    270813        Aug-2007    Acer    267226

Sep-2007    HP    272242        Sep-2007    Acer    262497

Oct-2007    HP    216063        Oct-2007    Acer    212601

Nov-2007    HP    185808        Nov-2007    Acer    236073

Dec-2007    HP    303301        Dec-2007    Acer    260296