Back to Market Analysis

After a few months off, I am returning to market analysis. As a first small step, here is a link to Yahoo Finance’s Industries webpage:

http://biz.yahoo.com/ic/

Eight.

To help organize my modeling, I examined 29 charts in MFN and I found that there are 8 basic “floorplans”, which I creatively labeled A-H. The breakdown is as follows:

A: 3      1.1, 9.1, 12.1 (251) (pp.6,178, 251)
B: 5      1.2, 2.1, 2.2, 2.3, 2.4, (15,29,29,30,33)
C: 3      3.1, 3.2, 3.3 (52,60,61)
D: 3      3.4, 5.3, 5.4  (63,99,110)
E: 11     5.1, 5.2, 5.5, 7.2, 7.4, 9.2, 9.5, 9.6, 9.7, 13.1, 13.2 (96,98,117,142,147,186,192,194,198,270,271)
F: 2      7.1, 9.3  (141,188  )
G: 1      7.3 (143)
H: 1     13.3 (279)

Later blogs will include pictures of these floorplans for the time being, lets find the relations between the plans. Page numbers for exemplars are listed in parentheses.

A: Suppliers, Focal Firms, and Buyers (6)
B: W(y) / S(y) / C(y) plot. (15)
C: Market Plane (52)
D: y(n) Plot. (63)
E: Market Plane plus Paradox. (extension of C): (96)
F: Market Space for Aggregates (141)
G: New Entrants. (143)
H: 3D Market Space (279)

C,E,H build on each other.

Six.

Statistics from Markets from Networks.

pp. 335- Ordinary (From Top. S(y), W(y), C(y), y,  Price)

ORD1
2.76     3.01     3.27
1.20     1.31      1.42
.644     .634    .582
.165     .192      .225
7.27     6.82     6.31

ORD2
2.71     3.15       3.96
1.18     1.37       1.72
.513     .600      .771
.133     .182       .290
8.87      7.53      5.93

ORD3
2.16      2.42      2.83
.938     1.05      1.23
.366     .406      .471
.098     .128      .186
9.57     8.20     6.61

ORD4
.833    .994       1.28
.362     .432      .555
.176      .210      .270
.072     .101      .162
5.03     4.28     3.43

ORD5
.900      1.11      1.27
.460      .569     .648
.306      .353     .337
.012      .016     .020
38.33     35.56   32.40

Four.

There are three ideal types of markets that we can distinguish. Reading across, we have volume, price, and revenue. We have:

Market A: Phi =1 (All Prices the Same)
32    10     320
26    10     260
24    10     240
18    10     180

Market B: Phi < 1  (Decreasing Returns to Scale)
32    8.5   272
26    9.0   234
24    9.5   228
18    10     180

Market C: Phi > 1 (Increasing Returns to Scale)
32   10     320
26   9.5   247
24   9.0  216
18   8.5   153

We will be playing around with these some more, so keep these figures in mind. Since the middle column is price, and is obtained by dividing the third column by the first, we actually can do away with these, and knowing this rule allows us to reduce our little equations even more, to:

A: CRS
32    320
26    260
24    240
18    180

B: DRS
32    272
26    234
24    228
18    180

C: IRS
32   320
26   247
24   216
18   153

There are a lot of things we can calculate from these basic figures, our observables. For ease, we can also give our markets numbers as well, which in our case is the market revenue. A is associated with 1000, B, with 914, and C with 936. This is merely a mnemonic to remember. Also, since we have fixed one of the columns as well, the [32,26,24,18] line, we can also get rid of that and identify each of the markets as follows:

A: 320, 260, 240, 180 – (1000)
B: 272, 234, 228, 180 – (914)
C: 320, 247, 216, 153 – (936)

Reverse these, so that they are in volume order:
A:  180,240,260,320 – (1000)
B:  180,228,234,272 –  (914)
C:  153,216,247,320 – (936)

This is an easier form to think about the market, since we can know transfer this over to the W(y) Graph Form.