Season 2, Episode 1: Copa Di Vino, owned by James Martin, is the first premium wine sold by the glass. James, currently controls the vertical chain of production: he has a winery, packages his own wine by the glass, and distributes the wine. However the sharks believe that company’s value will be higher if it vertically disintegrates. The sharks are only interested in the intellectual property (patent) that James holds, since he is the sole producer that can package wine in this form. They believe his monopoly power over the packaging will reap the highest profit by licensing it to others. James does not want to split the company and believes it is more profitable as one firm because of the high subjective value he places on his brand. He leaves the tank without a deal.
Posts Tagged ‘subjective value’
Season 5, Episode 8: James Ambler, owner of Paparazzi Proposals, values Lori Greiner’s help over Robert Herjavec’s and ultimately chooses to take less money for the same amount of equity in his company. Like any rational economic actor, he had to weigh the perceived costs and benefits of his decision, but it was not simply about dollars — he valued Lori’s input very highly. Even though he accepted less money, the entrepreneur still made a rational decision. Try pausing the clip before the entrepreneur makes his decision and ask students what they would do in this situation. Would they take the deal with Robert? Or would they reject him to have Lori on their team? Why would they make this choice? This provides an excellent basis for discussing subjective value, marginal thinking, and rational choices.