term paper market structure

Market Structure

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• F. M. Scherer 2  

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Since antiquity, a distinction between monopoly and competitive market structures has been recognized. Aristotle (Book I, 5) characterized ‘monopoly’ [ μ ó ν os (alone), \( \pi \omega \lambda \upepsilon \iota \overset{\frown }{\nu } \) (sell)] as a situation in which a single trader engrossed the entire supply. He recounted how one such iron ore monopolist had been expelled from Syracuse by its ruler, Dionysius. Adam Smith (1776, Book I, chapter VI) advanced somewhat beyond the Aristotelean schema, contrasting the price under monopoly (‘the highest which can be got’) to that of free competition (‘the lowest which the sellers can commonly afford to take, and at the same time continue their business’). The most important single step toward a modern theory of how market structure matters was taken by Cournot (1838). He perceived correctly that a monopolist confronts the downward-sloping demand function for its product, and he derived the mathematical conditions (essentially, equality of marginal revenue with marginal cost) by which the monopolist maximized its profits. He then showed how market prices fell with increasing numbers of competitors, converging in the many-seller case toward a zero-profit condition. Thus Cournot provided among other things the first theory of oligopoly, that is, of markets with only a few sellers.

This chapter was originally published in The New Palgrave: A Dictionary of Economics , 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman

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Bibliography

Aristotle. 1984. Politics . From The complete works of Aristotle , ed. J. Barnes, Princeton: Princeton University Press.

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Bain, J.S. 1956. Barriers to new competition . Cambridge, Mass.: Harvard University Press.

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Caves, R.E., Fortunato, M. and Ghemawat, P. 1984. The decline of dominant firms, 1905–1929. Quarterly Journal of Economics 99(3), 523–546.

Cournot, A. 1838. Recherches sur les principes mathématiques de la théorie des richesses . Paris: Hachette.

Gaskins Jr., D.W. 1971. Dynamic limit pricing: optimal pricing under threat of entry. Journal of Economic Theory 3(September): 306–22.

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Gibrat, R. 1931. Les inégalités économiques . Paris: Recueil Sirey.

Robinson, J. 1933. The economics of imperfect competition . London: Macmillan.

Scherer, F.M. 1980. Industrial market structure and economic performance , 2nd ed. Boston: Houghton Mifflin.

Scherer, F.M., A. Beckenstein, E. Kaufer, and R.D. Murphy. 1975. The economics of multi-plant operation: An International Comparisons Study . Cambridge, MA: Harvard University Press.

Schumpeter, J.A. 1942. Capitalism, socialism, and democracy . New York: Harper.

Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations . London: W. Strahan & T. Cadell.

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Scherer, F.M. (1987). Market Structure. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_960-1

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DOI: https://doi.org/10.1057/978-1-349-95121-5_960-2

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Any market structure constitutes three market attributes, which include the number of sellers, the nature of exiting products and services, and the ease of entry or exit into the market. In today’s economy, there are different types of markets. In some markets, producers are highly competitive while in others, producers are engaged in the coordination of action to avoid direct competition with each other (Kurtz, 2014). From a general perspective, market structures are classified as perfect competition , monopoly, monopolistic competition, and oligopoly (Stackelberg et al, 2010). The main objective of this research paper is to describe each market structure in terms of entry barriers and long-term profitability. In addition, the paper will also describe the best market structures for selling and buying products, and the response to each of the market structures to price changes. The role of the government and international trade on the market structures will also be a subject of focus in this research paper.

Types of market structures

Perfect competition.

Perfect competition in a market characterized by a homogenous product, a large number of small firms, and the existing laws and regulations make it easy to enter and exit the market. In a perfect competition, the attribute of a large number of small firms is fulfilled when none of the firms has a significant share of the total output (Baumol & Blinder, 2012). This means that no firm has the ability to affect product prices. In the United States, there are thousands of pork farmers operating independently. If one farmer raises the price of pork, the going market price of pork is unaffected (Kurtz, 2014).

In perfect competition, the firms produce a homogenous product. This is an indication that the goods or services produced in this market structure are identical. This assumption is essential in the market because it rules out the possible rivalry among businesses in quality and advertising differences (Stackelberg et al, 2010).

In perfect competition market structure it is easy to enter into the market considering that there are no barriers facing new firms. In perfect competition, it is a requirement that the resources are mobile making it easier to enter and exit the market (Amacher & Pate, 2013). The possible barriers for regulations can be government imposed and they include patents, permits, and licenses (Baumol & Blinder, 2012).

Perfect competition is therefore characterized by the selling of homogenous goods or services by a large number of highly informed sellers. The market has a single market price, which is determined by some level of interaction between buyers and sellers. Each firm in this market structure has an infinitely elastic and horizontal demand (Kurtz, 2014).

There exists only one seller or buyer for a product in this market structure. This means that the single business entity is the industry. Entry into such a market structure is highly restricted because of different impediments such as high cost. These impediments may be political, social, or economic (Baumol & Blinder, 2012). For example, it is possible for a government to create monopoly tin an industry that it intends to control such as the energy industry. Entry is relatively difficult in this market structure because most of the times a single business entity has exclusive rights to the targeted natural resources (Amacher & Pate, 2013). For instance in the United Arab Emirates, the governments is the sole controller of the oil industry. It is also possible for monopoly to exist in a market when the controlling company has a patent or copyright which prevents other companies from entering the market. For example, Prifzer has a patent on Viagra (Kurtz, 2014).

In monopolies, barriers of entry are considered as the most effective strategies that make the single business entity profitable considering that other firms are prevented from accessing the market. Entry barriers take numerous forms (Amacher & Pate, 2013). For example, monopolistic strategies can be introduced to control scarce resources as in the case of De Beers Company and the diamond industry (Stackelberg et al, 2010). This makes such companies have the ability to act through unconstrained methodologies. Despite the perceived advantages, monopolies have the ability to impose inefficiencies in the society. However, if they arise when the entity discovers an improved and efficient technique in the manufacture of products ore engaged in the creation of new products aimed at fulfilling unmet consumer needs, then the consumers are destined to benefit from monopoly (Stackelberg et al, 2010).

Oligopoly  

This is a market structure characterized by only a few firms. These companies sell products or services that may not be completely standardized but they are similar enough that they are in competition (Amacher & Pate, 2013). Examples of oligopolies include fast food burgers such as Kentucky Fried Chicken, McDonalds, and Burger King. Other oligopolies in the United States market are wireless network providers such as Sprint, Verizon, and T-Mobile (Kurtz, 2014). One of the defining features of an oligopolistic market structure is that the success of firms in the market is often determined by the initiatives of major rivals (Kurtz, 2014). In an oligopoly there is often need to monitor the activities of the companies considering that their actions have the ability to affect the market (Baumol & Blinder, 2012). In an oligopoly, it is vital for companies to keep track of their competitors. For instance, the shareholders of Kentucky Fried Chicken would not be impressed if the management had no idea that Burger King had introduced a new kind of product or that McDonald was offering promotional discounts on soft drinks (Stackelberg et al, 2010).

In an oligopolistic market structure, there are barriers of entry. For example, it is possible for a new wireless company to set up a wireless carrier. However, it would be relatively costly to construct the infrastructure. It would also be possible to break into the national fast food market chain but relatively complex to overcome brand allegiances (Kurtz, 2014).

Monopolistic competition

Monopolistic market structuure is characterized by many companies engaed in the sale of goods or services that are similar but have some slight differences. Inasmuch as the name monopolist competition may seem a contradiction, it connotes the idea that companies in such a market possess some level of monopoly though in a limited sense. Monopolistic competition is different from perfect competition and monopoly (Kurtz, 2014). This is because in the former, consumers are indifferent between the available products of competing companies. In the latter, the existing products do not have any close substitutes. In between perfect competition and monopoly, there exists a market in which products have substitutes, which are not perfect but share some relationships (Amacher & Pate, 2013). In such situations consumers are often willing to extra, but if the price differentials in relatively large, they will go for a substitute or alternative product instead. In mid-20 th century, Sun Records had a monopoly in the sale of Elvis Records. During this period, there consumers had no choice but to buy the record from Sun. In monopolistic competition, devoted consumers may be willing to pay extra money for an Elvis record than music by other artists (Stackelberg et al, 2010). In this situation, Sun has the authority of setting its product price to a certain level. However, if Sun raises the price of Elvis records to a high level, most customers would prefer save their financial resources or instead buy records by other musicians (Stackelberg et al, 2010).

Since the firms that constitute a monopolistic competition own a small percentage of the total market, they have the ability to provide differentiated products and this makes this market structure different from pure competition and monopoly models (Amacher & Pate, 2013). Other factors that characterize monopolistic competition include advertisements, product differentiation style, firm location pricing strategies, and packaging techniques. Furthermore, this model of markets structures is also characterized by easy exit and entry for businesses (Kurtz, 2014).

Companies that operate in a monopolistic competition market structure have are characterized by demand curves that are highly but not perfectly elastic. The demand curve is more elastic than the monopoly demand curve considering that the firms have other competitors involved in the production of close substitutes. The demand curve is however, less elastic compared to pure monopoly considering that the products by the sole company are differentiated for those of its competitors (Stackelberg et al, 2010).

The MR=MC rule has the ability of giving companies their profit maximization output. This means that for companies, the prices they charge will be on the demand curve. When profit maximization is considered in the end, it is possible to assert that the situation will tend to break even in the companies (Stackelberg et al, 2010). Companies can enter the market easily but the demand curve facing by an individual company will shift down as the buyer’s shift their demand to the products by the new firm until the company breaks even. It is important to note that any shift demand below the breakeven point, some companies will move out of the industry. This means that most firm operation in monopolistic competitive structure is bound to experience break-even in the long run from a theoretical perspective (Stackelberg et al, 2010). In the real sense, some companies realize profits since they are able to differentiate themselves from their competitors and build a base of loyal customers. There are also companies in the monopolistic competitive structure that experience losses in the long run but they continue operation within the market with the objective of realizing profits. The firm owners often prefer a flexible lifestyle and are often willing to earn normal profits that are lower than their opportunity cost (Kurtz, 2014).

In situations where the marginal surpasses the cost by the price, then it is possible to assert that the society values additional units that are not being produced. It is also possible for the average cost to be higher in monopolistic competition considering that they have to incur advertising cost as a way of attracting more customers (Stackelberg et al, 2010).

Best market structure for buying and selling products

Perfect competition presents the best market structure for buying and selling products. This is because perfect competition is rare in the contemporary world but it is an important model because it helps in the analysis of competition within an industry especially in the stick market and in the agricultural industry (Kurtz, 2014). In selling a product, an individual company operating in a perfect competition model often views its demand as a perfectly elastic. A horizontal line at the rice level characterizes the resulting demand curve that demonstrates perfect elasticity. The demand curve only appears in this form for individual firms since they have the responsbility of accepting the prevailing price no matter the amount of products or services they produce. The marginal revenue that connotes an increase in total revenue, results from a unit increase in output (Kurtz, 2014). The perfect competition market structure is considered the best in buying products because the price is always constant. In the short term, the interactions between supply and demand play an essential role in the determination of the clearing price (Stackelberg et al, 2010).

A common attribute that defines markets considered competitive include lower prices because of the presence of many competing firms within the market selling almost similar products or services. In situations where there is high cross-priced elasticity of demand of a single service or product, then the customers will be ready to switch their demand to the most competitively priced service or product in the market (Kurtz, 2014).

In perfect competition, there are low or no entry barriers. This means that it presents perfect conditions for a company willing to engage in the sale of its products in a new market. For a new firm, its entry is considered to be providing some level of competition to ensure that the prices are constant (Kurtz, 2014). Perfect competition model presents companies with the best alternative for selling their prices without incurring high loses. This is with regard to their opportunity cost because the prevailing laws in the market demand constant prices for all commodities irrespective of the cost of production. Relatively low and constant prices maintained in this market ensures that firm within the market realize relatively lower profits and profit margins compared to monopolies or oligopolies where the market is dominated by a few selected companies (Amacher & Pate, 2013). Effective selling and buying of products in any reputable market structure requires the high level of entrepreneurial activities considering that competition is a necessary process in nay market. for any market to realize and sustain high levels of competition companies must demonstrated genuine desires on behalf of their businesses to invents and innovate ways of driving the market forward (Kurtz, 2014).

In perfect competition model, the threat of competition with regard to product differentiation often leads to improvements in the rate of technological innovation and adoption. This is because companies within this industry are required to be responsive to the dynamic need of the consumers (Kurtz, 2014). Perfect competition is considered essential for buyers and sellers since it provides some level of discipline for companies in the market to ensure that their costs of production and eventual prices are maintained at a constant. This approach if effective since it minimizes wastage of scarce resources while at the same time refraining from the exploitation of consumers through high product prices and profit margins (Stackelberg et al, 2010). Through this approach, it is possible for these companies to stimulate competition and improvements in this market making it more dynamic with regard to the quality of products. In the end perfect competing market structure since it has the ability exhibiting high levels of economic efficiency (Amacher & Pate, 2013). For the optimal economic efficiency to be realized it would be important for all the conditions and the defining attributes of perfect competition to be upheld. In perfect competition, improved technologies such as the internet have made it easier to engage in price comparison in a quick and efficient. Furthermore, the internet has also contributed to the relaxation of entry barriers (Stackelberg et al, 2010).

Perfect competition is however different from monopolistic competition because in the latter profit maximization occurs in situations where marginal revenue is equal to the marginal cost. This is compared as a relatively inefficient because the resulting quality is less compared to that which is produced in a perfect competition market structure (McEachern, 2013). This means that for producers it is possible to supply products below their capacity of manufacturing. Like monopolistic competition, monopoly enhances the creation loses and inefficiencies when price determination is based on quantity produced (Kurtz, 2014).

Market structures are important in any economy since they define the nature of business and the strategies that producers must employ in an attempt to attract consumers. Market structures are classified as perfect competition, monopoly, monopolistic competition, and oligopoly. Perfect competition presents the best market structure for buying and selling products. This is because it helps in the analysis of competition within an industry especially in the stick market and in the agricultural industry. A common attribute that defines markets include lower prices because of the presence of many competing firms within the market selling almost similar products or services. In monopolistic competition profit maximization occurs in situations where marginal revenue is equal to the marginal cost. This is compared as a relatively inefficient because the resulting quality is less compared to that which is produced in a perfect competition market structure.

Amacher, R., & Pate, J. (2013). Microeconomics principles and policies . San Diego, CA:

Bridgepoint Education, Inc

Baumol, W. J., & Blinder, A. S. (2012). Macroeconomics: Principles & policy . Mason, OH:

South Western, Cengage Learning.

McEachern, W. A. (2013). Contemporary economics . Mason, Ohio: South-Western Cengage

Kurtz, D. L. (2014). Contemporary Marketing . Australia: South-Western Cengage Learning

Stackelberg, H. ., Bazin, D., Urch, L., & Hill, R. (2011). Market structure and equilibrium .

Berlin: Springer.

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Market Structures and Pricing Strategies Research Paper

Introduction, perfect competition, monopolistic competition, case study with examples.

A market structure is a tool used to determine the pricing power of certain products in diverse firms. Research has shown that there are numerous market structures with unique pricing strategies in place. The price of goods and services in a firm depend on the levels of demand, cost conditions and competition.

Besides, price fixation is one of the key managerial functions. It is frequently reviewed to ensure that a firm makes a reasonable profit margin. The market conditions determine the type of market structure and pricing criteria to be used in a particular firm. Moreover, businesses cannot operate in isolation.

In other words, a firm requires a robust marketing platform for it to operate effectively. Hence, it is important to select an appropriate market structure for a business to make significant returns. Economists have identified four major market structures that are unique in terms of both operation and effectiveness in meeting the demands of customer. The market structures have been discussed in this paper in relation to pricing strategies.

A market structure can be defined as a core characteristic that makes up a platform for buying and selling goods and services (Samuelson & Marks, 2006). It is common knowledge that a market exists when there are buyers, sellers, products, competition, product differentiation as well as the ease of entry or exit.

From this definition, Rubin and Dnes (2010) highlight that market structures are individual aspects that influence the behavior of buyers and sellers. Ellickson, Misra and Nair (2012) also define a market structure as the number of firms in a market that are able to produce similar goods or services. The nature of a market structure greatly influences the behavior of producers.

Therefore, it affects the market price of a particular commodity or service (Rubin & Dnes, 2010). In addition, a market environment affects the supply of commodities and equally creates barriers for entry. This paper discusses some of the notable market structure by analyzing their pricing strategies alongside relevant examples.

Description

This describes a situation whereby a firm does not have a particular independent pricing policy. Therefore, firms that embrace this market structure have to comply with the prevailing market prices (Samuelson & Marks, 2006). At this point, a firm is at liberty to market its goods and services.

Lack of control over a market often creates an open platform for buyers to choose less costly products. If a firm sets very high prices in a marketplace, it might end up making few or no sale at all. It is important to note that in this type of a market structure, there is no specified price for certain quality or quantity of goods (Rubin & Dnes, 2010).

Therefore, it is upon the seller to decide which quantity to offer and at what price. Typical firms have no influence over demand and supply because new sellers enter the market as they wish. Ellickson et al (2012) assert that typical competitors in such a market end up earning no profit at all. Rubin and Dnes (2010) point out that there are no barriers to enter or exit such a market structure since there are unlimited number of both sellers and buyers.

From an economic perspective, this market structure exists when firms produce similar and standardized products. It implies that different firms only compete for prices. Moreover, buyers are aware that price competition exists. Therefore, all the available products must be sold at a common or poplar market price (Rubin & Dnes, 2010).

Both consumers and firms also tend to countercheck the price even though they have no direct influence on the market. In order for a firm to maintain its customers, it is compelled to sell either at the prevailing market price or at a lower price altogether (Samuelson & Marks, 2006). Therefore, firms end up selling a small proportion of their total output.

Pricing Strategies

Prices are determined by the forces of supply and demand. It is worth to note that there is perfect substitution where all firms produce homogenous, standardized and undifferentiated products. At this point, the demand curve in each firm is perfectly elastic and horizontal to the price line (Rubin & Dnes, 2010).

This implies that a firm can only sell some of its output without altering the price. Any slight increase in price results into lack of sales since buyers tend to resort to a substitute from other competitors. In this type of a market structure, the “law of one price” does not change and all market transactions are done at the same price (Samuelson & Marks, 2006).

In this type of a market structure, a firm ignores a market price and sets it own pricing without considering the causal effects of other firms with different prices. In this case, a group of producers offer a common product that is not identical. Therefore, it triggers competition.

Firms deliberately differentiate their products and set prices that are competitive in nature (Samuelson & Marks, 2006). It is important to note that there are no market barriers. Monopolistic competition resembles a perfect competition model except that the products of the former are different.

Firms set their own prices that are different from those of competitors since products sold are also differentiated in terms of quality and quantity. In this case, firms aim to create brand names by reinforcing product differences (Rubin & Dnes, 2010).

Product differentiation is one of the strategies that enable producers to set high prices without necessarily losing market dominance to competitors. It is worth to note that the demand is elastic hence; firms can increase their prices whenever they wish to do so (Samuelson & Marks, 2006).

In this case, about three sellers occupy a larger share in a particular market. The firms may experience price wars as they compete against each other for maximum gains. Increasing prices affects the volume of sales of other firms (Ellickson et al., 2012). For instance, when one of the competing firms increases its market prices, consumers will obviously buy from the competitors.

Therefore, producers must assess the impacts of their decisions in order to decrease or increase prices. It is worth to note that few sellers in the market may be rivals. This may eventually lead to conflict (Samuelson & Marks, 2006). However, there is great ease of entry into the market unlike the case with a monopolistic structure.

Sellers first understand the behavior of consumers before setting prices. The pricing policy of an individual producer affects others. Therefore, there is an element of price rigidity that compels producers to opt for non-price competition (Samuelson & Marks, 2006). At this point, prices are no longer depicted by demand and supply.

Prices are set after critical, interactive and strategic thinking (Samuelson & Marks, 2006). The fate of oligopoly pricing strategy is interdependent even though it is determined by economic factors such as consumers’ tastes and preferences.

This refers to a market structure whereby there is only one seller of a particular product. In other words, a single firm in the market offers goods or services to consumers. Nonetheless, pure monopolies are rare. From the statistical review of literature, it is evident that a monopolistic market generates approximately 3% of the gross domestic product (GDP) in the developed economies such as the US and UK (Samuelson & Marks, 2006).

Hence, monopoly exists when 90% of the market is dominated by a single firm. Rubin and Dnes (2010) elucidate that barriers to market entry are common in this type of market structure. This is a precondition that is deliberately set to prevent other firms from venturing into the market (Rubin & Dnes, 2010). Furthermore, there are no perfect substitutes. Consumers have no choices to make since they have to buy products available in the market.

Prices of goods and services are determined by single players in this type of a market structure. Most monopolists use trial and error method when pricing their products. Ellickson et al (2012) argue that monopolists also determine prices by balances profits and losses.

When a firm reaches an equilibrium point where marginal costs are in the same level with marginal returns, monopolists decide their best market price (Samuelson & Marks, 2006). Usually, monopolists set higher prices that generate maximum gains. However, a firm may differentiate prices for various buyers in diverse regions. The price differentiation approach depends on the elasticity of demand.

Dumping is also a pricing strategy used by monopolists (Rubin & Dnes, 2010). In this regard, products fetch higher prices at the domestic market than in the international platform. However, monopolists do not just escalate prices. In other words, the optimal price is influenced by demand (Ellickson et al., 2012).

In the last few years, intense competition has been witnessed among telecommunication companies that supply cables, satellites and other communication services. Broadcasting networks have also exercised perfect competition for several decades. Internet service providers and social media platforms such as Facebook, Twitter, Instagram and Google plus have thrived in perfect competition (Samuelson & Marks, 2006).

This has greatly encouraged other service providers to venture into the market. Besides, firms that produce and sell foodstuffs such as fast food restaurants and supermarket outlets exercise monopolistic competition. These sellers produce diverse brands that appeal to the larger market niche (Samuelson & Marks, 2006).

The deregulation of products’ varieties and discounts gives clients the freedom to purchase goods or services that they can afford. In the United States, there are limited number of organizations that offer similar services and products. For instance, the Airbus and Boeing companies are renowned aircraft companies that compete against each other (Samuelson & Marks, 2006).

There are also hybrid automobiles that compete with traditional gasoline-powered automobiles. World-renowned soft drink companies such as Coca Cola and Pespi compete through pricing strategies thereby making the market to be oligopolistic in nature (Samuelson & Marks, 2006).

Some countries such as the US and India give firms and business people exclusive rights to sell their inventions for a specified period. Therefore, some firms have patents that grant them authority to sell their products for a period of 10 years (Samuelson & Marks, 2006). This prevents other people from copying, processing or applying such ideas.

A good example is the Microsoft Company that deals with computer software. It spearheads monopoly by preventing the entry of other compute software companies into the market (Samuelson & Marks, 2006). Governments have been known to allow lawful monopolies for a given length of time.

From the above discussion, it is explicit that a market environment influences pricing strategies. There are four major market structures. These market structures have diverse attributes such as the degree of barrier to market access, the extent to which a firm controls the price, and the number of sellers.

In monopolistic and perfect competition, there are numerous sellers hence there is no entry barrier into the market. Therefore, producers set prices that are influenced by elasticity of demand. In oligopoly, there are a few sellers competing against each other and prices are determined by other economic factors apart from demand and supply.

There are significant but less prohibitive market barriers and price rigidity in oligopolistic markets. Contrastingly, a monopoly has a single firm supplying and determining the price of products in a market. There are numerous barriers that prevent other potential sellers from entering a monopolistic market.

Ellickson, P. B., Misra, S., & Nair, H. S. (2012). Repositioning Dynamics and Pricing Strategy. Journal of Marketing Research (JMR), 49 (6), 750-772.

Rubin, P. H., & Dnes, A. W. (2010). Managerial economics: a forward looking assessment. Managerial & Decision Economics, 31 (8), 497-501.

Samuelson, W., & Marks, S. G. (2006). Managerial economics . Boston: John Wiley & Sons, Inc.

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IvyPanda. (2023, December 19). Market Structures and Pricing Strategies. https://ivypanda.com/essays/market-structures-and-pricing-strategies/

"Market Structures and Pricing Strategies." IvyPanda , 19 Dec. 2023, ivypanda.com/essays/market-structures-and-pricing-strategies/.

IvyPanda . (2023) 'Market Structures and Pricing Strategies'. 19 December.

IvyPanda . 2023. "Market Structures and Pricing Strategies." December 19, 2023. https://ivypanda.com/essays/market-structures-and-pricing-strategies/.

1. IvyPanda . "Market Structures and Pricing Strategies." December 19, 2023. https://ivypanda.com/essays/market-structures-and-pricing-strategies/.

Bibliography

IvyPanda . "Market Structures and Pricing Strategies." December 19, 2023. https://ivypanda.com/essays/market-structures-and-pricing-strategies/.

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How to Write a Term Paper

How to Write a Term Paper - Getting to the Basics

A term paper is generally structured with an opening introduction, followed by several body paragraphs, and culminates with a conclusion. It articulates a central thesis statement, bolstered by corroborative evidence and critical analysis. The writing is formal in nature, adheres to a designated formatting style like APA or MLA, and is complemented by accurate citations and a comprehensive bibliography.

Writing a term paper is a structured process that demands careful planning and execution. Here’s a step-by-step approach to guide you:

• Understand the Assignment : Ensure you grasp the requirements, the topic's scope, and the deadline.
• Choose a Topic : Select a topic that is interesting to you and meets the assignment's criteria. It should be narrow enough to explore fully within the paper's constraints.
• Conduct Preliminary Research : Gather background information to further refine your topic, develop a thesis, and create a research question.
• Develop a Thesis Statement : This is the central argument or claim of your paper. It should be clear, concise, and arguable.
• Create an Outline : Organize your main points and supporting details into an outline. This will serve as a roadmap for your term paper.
• Conduct Detailed Research : Use credible sources to collect evidence and information that support your thesis. Take careful notes and keep track of your sources for citations.
• Write the Introduction : Start with a hook to grab the reader's interest, provide background information, and present your thesis statement.
• Write the Body : Each paragraph should focus on a single point that supports your thesis. Use evidence and analysis to back up each point.
• Write the Conclusion : Summarize your main points and restate the thesis in the context of the evidence you provided. Discuss the implications of your findings or future directions for research.
• Revise and Edit : Look for any gaps in logic or content, check for clarity and flow, and ensure each part of the paper supports your thesis. Edit for grammar, spelling, and punctuation errors.
• Format Your Paper : Follow the required citation style (APA, MLA, Chicago, etc.) for your discipline, and ensure your paper adheres to all formatting guidelines.
• Final Review : Give your paper a final read-through, checking for coherence, structure, and formatting.
• Submit : Turn in your paper by the deadline, and ensure you have a copy saved for your records.

You always hear the word “term paper,” and in the most basic sense, it is the paper that sums up everything you have learned in a term or semester. Think of it as the ‘gate pass’ for a checkpoint in a game: you need to secure one by finishing one important challenge.

As every game requires, that particular challenge is not similar to other challenges you have encountered. Thus, you must conserve every remaining energy and time to prepare for the challenge.

Going back to our topic, term papers require your knowledge, effort, and time. You can only produce a faultless and astounding term paper once you have mastered the fundamental things you will continuously see in every paper you will be crafting in the coming semesters.

Research-Based

In a term paper, you may not want to ditch your personal experiences or observations when integrating what you have learned in a single term or semester. Most of the time, integrating salient findings and concepts from literature and other scholarly sources may be required depending on the type of paper you are asked to write.

A topic, especially if it is purely theoretical or academic, may warrant you to do a literature review and background research. Fret not, though, as this blog will guide you through making your term paper a work of research.

Since a term paper is research-based, it is almost always impossible not to involve critical thinking and analysis on a certain topic. After all, the best way to discuss a topic, especially if it is complex, is to break it down into pieces. Once disassembled, you can evaluate the evidence, examine its validity, and draw reasoned conclusions based on your findings.

Thesis Statement

You might be able to equate a term paper to an essay. They seem to get along, especially with the structure and purpose of writing. However, you can never go wrong with formulating a good thesis statement for your term paper.

As it is more similar to a research paper, a term paper can be quite long, so having a good thesis statement reinstates the main argument or purpose of your writing. It guides the entire direction of your paper and helps your reader grasp its focus– no matter how long and winding his or her experience will be.

Logical Flow

We may love a fun, creative, and often chaotic way of writing, especially when reading a narrative essay as a coursework assignment. Sorry to burst your bubbles, but a term paper may not follow the same route.

As a standard term paper is full of concepts, terms, arguments, and ideas, it deserves great attention to logic and organization. This means that each section of the paper must build up from the previous one, and transitions between paragraphs and sections should observe smoothness and coherence.

What is a Term Paper In Terms of Its Various Types and Forms

Writing a term paper entails preparation. You can only wish that you have a ton of brain cells and resources to help you finalize your paper that is good for submission– and a stellar score.

However, preparation is only one thing in the long-lasting process of term paper writing.

The term paper structure will still depend on the scope of analysis, as well as the categories of the term paper. Yes, you saw it correctly: types or categories of term papers may have different structures or, in most cases, purposes.

This part of your journey in term paper writing will acquaint you with different types of term papers according to purpose and structure. 

Analytical Paper

From the word itself, an analytical paper requires you to break down a concept, theory, or phenomenon into several parts. These parts may come in the form of elements, experiences, principles, and many other related components.

An analytical paper aims to examine these parts critically and evaluate them accordingly. Analytical papers are often found in social sciences and humanities, and they are mostly requested for a term paper writing service .

Possible topics that resemble your future topic under the mentioned fields are critiquing a philosophical theory or analyzing globalization's impact on a specific country's pop culture.

Argumentative Paper

What is a term paper without presenting a stance? In an argumentative term paper, your professor might give you a debatable or controversial topic that requires your critical thinking and persuasive skills to be utilized.

In this type of term paper, you must integrate a literature review and empirical evidence to support your stance and counter several opposing views. Argumentations are often found in several branches of the social sciences, such as law, ethics, and literature.

You may stumble upon topics like augmenting a controversial public policy or defending a particular interpretation of a literary piece.

Descriptive Paper

Fulfilling this type of term paper entails more than injecting fancy adjectives, imageries, and vivid narrations. When dealing with descriptive term papers, you must provide a detailed overview of a particular topic, event, phenomenon, or concept.

If you ask me how to format a term paper of this kind, the descriptive language used must be realistic and accurate, not just merely ornamental. This orientation would provide a seamless and truthful picture for the reader of your paper.

Although your term paper may be descriptive, objectivity should not be taken away. Descriptive term papers are mostly required in the natural sciences, such as physics, chemistry, Earth science, and biology. A perfect example is the description of the geological features of a national park. 

Comparative Papers

True to its name, this type of term paper compares and contrasts two or more theories, subjects, schools of thought, and approaches.

Upon taking the two major steps, you will need to analyze the similarities and differences between the elements, and you may formulate conclusions regarding their significance or implications. Comparative term papers are commonly seen in economics, political science, literature, sociology, and history.

A prime example might be comparing two distinct economic systems or analyzing the similarities and differences between political theories, such as Republicanism and Democracy.

Expository Papers

How to start a term paper of this type? We just have to take a hint at its name: it ‘exposes’ a piece of information. Elaborating on this, term papers adhering to this type explain or inform the prospective audience about a specific topic, concept, process, or phenomenon.

Since we are dealing with information, it has to be ensured that the latter must be accurate, truthful, and sufficient. Writing expository papers may also entail a handful of related writing tasks, such as defining key terms and organizing information according to related themes.

The fields that most likely require expository term papers are education, communication arts, journalism, and several liberal arts areas.

Grasping each type of term paper above may be quite a handful. Apart from preparing a term paper, you are confronted with a big challenge to choose a type or, in some cases, integrate one type into another.

Regardless of your writing decisions, you are always in for a treat: your term paper proposal will not be a failure if you are more than familiar with your purpose of writing one.

In addition, writing services like Studyfy let you access term paper help like no other. From your term paper outline to the final touches, an array of professional writers are present to provide personalized writing services for negotiable pricing.

What’s The Proper Term Paper Format? From the Ground Up

I am fully aware that you have been wired up with all the information you need to know about term papers, but do not falter yet, as we are just in the most needed part of this blog: formatting your term paper.

Writing a term paper will not be as polished and organized if you do not prepare your format ahead of your writing preparations. So, from conceptualizing your title to proofreading your paper, our tips and tricks will propel you to the towering heights of marks you have always aimed for.

Start Strong with Your Title Page

A well-established term paper will not be realized without a strong facade through a title page. Many students are seen as not focusing on this part of the paper, thinking that it does not hold as much importance as other parts, but if you are thinking the same, you need to change your mind.

Some instructors and professors look at the title page to check if you adhere to the formatting guidelines. If you are less likely to notice such inconsistencies, your professor might think you are not keen enough to eye important details in the rest of your paper.

Pro-Tip: As early as creating your title page, be sure to follow any specific formatting guidelines provided by your professor or academic institution, such as font size, spacing, and margin specifications.

Abstract– Concise Yet Complete

An abstract is likewise an important component of a term paper, just as in a research paper. It encapsulates the crucial pieces of information that the reader must know. It includes the background of the paper, methods, results, and implications of the findings.

While the abstract may require a specific word count that differs from one academic institution to another, it is generally preferred to keep everything short yet complete. Remember: the term paper itself will likely become wordy and extensive, so let us spare space for urgency on the paper’s abstract.

Pro-Tip : Keep everything concise and elaborate on the findings more than the background. The usual word count for an abstract is 150-200 words.

Term Paper’s Background: Where the Thesis Statement is Cleared Its Way

Term paper writing will get as fired up at this point since this part introduces the rationale or context of the paper, asking the question, “What is the topic all about?” In presenting the background, the introduction of the paper's main argument is given– the thesis statement.

This crucial part of the paper is often written as a declarative sentence or a question. To make everything clear and articulated, the paper’s background must provide an extensive exploration of the topic that could lead to formulating the thesis statement. There should be a profound connection between the rationale of the paper and its main purpose.

Pro-Tip : Term papers are more flexible than research papers and journal articles in terms of structuring their introduction. You may hook the reader's attention by putting an engaging opening sentence or anecdote.

Arranging Lit Review: To Each Its Own

Regardless of whether the literature review section of a term paper is separated or integrated into the introduction, this part must provide an extensive overview of existing research and scholarship relevant to the topic.

While one can put empirical and observational studies into the review, it is important to put a premium on reputable articles and research reports that are peer-reviewed and published in indexed journals. When no single guideline talks about a window period for acceptable literature, you may set one for yourself as a guide. 

Pro-Tip: Arrange the literature review thematically, chronologically, or topically, depending on the ways that you desire to highlight some aspects of your term paper.

To an Extensive Results and Discussion Section

Term papers will not be complete without the discussion section. This part seals the deal and is an important piece of a complex puzzle. It interprets the results in conjunction with the questions at hand and assesses their value by comparing them with previous studies according to their agreement or disagreement. 

Pro-Tip: When sourcing previous studies as points of reference for the results, always strive to find ones that both agree or disagree with them. This ensures the polarity and absence of bias in the reporting of the results.

Closing the Curtains with the Paper’s Conclusion

When concluding your term paper writing, always restate the thesis statement. It always feels right and justifiable if the main purpose of the entire term paper is reiterated in the last part of the paper. Apart from that, recommendations and final thoughts may be included in this section.

The conclusion section, deemed shorter than other key sections in the term paper, may come in a short paragraph or bullet format, depending on your guidelines.

Pro-Tip: New information that is not previously included in the paper is not welcome in the conclusion. You might need to write my term paper again if I committed a mistake. You may instead synthesize the key points and results and leave a lasting impression on your reader by either providing a strong closing statement or a reinforcement of the main argument of the term paper.

References and Appendices: Two Pieces That Complete

One may argue that writing term papers may not need references and appendices sections, but the material they provide may prove otherwise. Without the references, sources will not be identified nor assessed, leaving no room for integrity on the writer's part. 

Having no appendices section, on the other hand, does not provide enough context or additional information about the important plans that were executed during the creation of the paper. It is in these sections that small things matter.

Pro-Tip: Double-check the veracity of the references and appendices section. This may entail using the proper citation style for the reference titles and labeling the materials under the appendices section.

What’s a term paper? How to write a successful term paper?

A: A term paper is a type of academic paper that a student, typically from a higher academic institution such as a university, completes at the end of a semester or a term. Since it is considered a terminal requirement, writing a term paper requires one to conduct research, utilize higher-order thinking skills such as analysis, and present findings on a topic or subject by incorporating the knowledge and skills throughout the entirety of the term. 

Since a term paper qualifies as an academic paper, writing services offer custom term paper assistance whenever needed. It is only through tailor-fit writing assistance and professional guidance from seasoned writers that you can achieve a stellar grade without getting down a rough route, thanks to Studyfy.

How to write a term paper if there is a word count?

A word count may be a bummer for some, but it can motivate you to budget how you will use your words efficiently. Make sure to allocate several words strategically. It is recommended that the discussion section gets the highest allocation among all the term paper sections.

Your research and writing process can be influenced by the term paper format and word count. As academic papers often have a specific set of rules, make sure to follow them to the dot.

What is the general structure of a term paper? Is it the same as a research paper?

The universally accepted structure of a term paper is quite similar to a research report: title page, rationale/background, literature review, methodology, results and discussion, and references. An appendices section is optional but necessary for other fields of interest.

A good term paper is like a good research paper. Research papers, like other academic papers, follow the named predictable pattern; just make sure to present your own research through engaging body paragraphs and state primary and secondary sources, including other research papers you used while writing.

Are term papers similar to research papers? How similar and different is the writing process?

Term paper writing is similar to research writing in terms of structure and purpose. However, they differ in scope, audience, and length. While a term paper has a broader scope and is meant to be seen by the course instructor, a research paper has a narrower scope and is written for a wider academic audience. However, what's crucial is the thorough research process.

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Everything You Need to Know to Write an A+ Term Paper

Last Updated: March 4, 2024 Fact Checked

Sample Term Papers

Researching & outlining.

• Drafting Your Paper
• Revising Your Paper

Expert Q&A

This article was co-authored by Matthew Snipp, PhD and by wikiHow staff writer, Raven Minyard, BA . C. Matthew Snipp is the Burnet C. and Mildred Finley Wohlford Professor of Humanities and Sciences in the Department of Sociology at Stanford University. He is also the Director for the Institute for Research in the Social Science’s Secure Data Center. He has been a Research Fellow at the U.S. Bureau of the Census and a Fellow at the Center for Advanced Study in the Behavioral Sciences. He has published 3 books and over 70 articles and book chapters on demography, economic development, poverty and unemployment. He is also currently serving on the National Institute of Child Health and Development’s Population Science Subcommittee. He holds a Ph.D. in Sociology from the University of Wisconsin—Madison. There are 13 references cited in this article, which can be found at the bottom of the page. This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources. This article has been viewed 2,233,360 times.

A term paper is a written assignment given to students at the end of a course to gauge their understanding of the material. Term papers typically count for a good percentage of your overall grade, so of course, you’ll want to write the best paper possible. Luckily, we’ve got you covered. In this article, we’ll teach you everything you need to know to write an A+ term paper, from researching and outlining to drafting and revising.

Quick Steps to Write a Term Paper

• Hook your readers with an interesting and informative intro paragraph. State your thesis and your main points.
• Support your thesis by providing quotes and evidence that back your claim in your body paragraphs.
• Summarize your main points and leave your readers with a thought-provoking question in your conclusion.

• Think of your term paper as the bridge between what you’ve learned in class and how you apply that knowledge to real-world topics.
• For example, a history term paper may require you to explore the consequences of a significant historical event, like the Civil War. An environmental science class, on the other hand, may have you examine the effects of climate change on a certain region.
• Your guidelines should tell you the paper’s word count and formatting style, like whether to use in-text citations or footnotes and whether to use single- or double-spacing. If these things aren’t specified, be sure to reach out to your instructor.

• Make sure your topic isn’t too broad. For example, if you want to write about Shakespeare’s work, first narrow it down to a specific play, like Macbeth , then choose something even more specific like Lady Macbeth’s role in the plot.
• If the topic is already chosen for you, explore unique angles that can set your content and information apart from the more obvious approaches many others will probably take. [3] X Research source
• Try not to have a specific outcome in mind, as this will close you off to new ideas and avenues of thinking. Rather than trying to mold your research to fit your desired outcome, allow the outcome to reflect a genuine analysis of the discoveries you made. Ask yourself questions throughout the process and be open to having your beliefs challenged.
• Reading other people's comments, opinions, and entries on a topic can often help you to refine your own, especially where they comment that "further research" is required or where they posit challenging questions but leave them unanswered.

• For example, if you’re writing a term paper about Macbeth , your primary source would be the play itself. Then, look for other research papers and analyses written by academics and scholars to understand how they interpret the text.

• For example, if you’re writing a paper about Lady Macbeth, your thesis could be something like “Shakespeare’s characterization of Lady Macbeth reveals how desire for power can control someone’s life.”
• Remember, your research and thesis development doesn’t stop here. As you continue working through both the research and writing, you may want to make changes that align with the ideas forming in your mind and the discoveries you continue to unearth.
• On the other hand, don’t keep looking for new ideas and angles for fear of feeling confined. At some point, you’re going to have to say enough is enough and make your point. You may have other opportunities to explore these questions in future studies, but for now, remember your term paper has a finite word length and an approaching due date!

• Abstract: An abstract is a concise summary of your paper that informs readers of your topic, its significance, and the key points you’ll explore. It must stand on its own and make sense without referencing outside sources or your actual paper.
• Introduction: The introduction establishes the main idea of your paper and directly states the thesis. Begin your introduction with an attention-grabbing sentence to intrigue your readers, and provide any necessary background information to establish your paper’s purpose and direction.
• Body paragraphs: Each body paragraph focuses on a different argument supporting your thesis. List specific evidence from your sources to back up your arguments. Provide detailed information about your topic to enhance your readers’ understanding. In your outline, write down the main ideas for each body paragraph and any outstanding questions or points you’re not yet sure about.
• Results: Depending on the type of term paper you’re writing, your results may be incorporated into your body paragraphs or conclusion. These are the insights that your research led you to. Here you can discuss how your perspective and understanding of your topic shifted throughout your writing process.
• Conclusion: Your conclusion summarizes your argument and findings. You may restate your thesis and major points as you wrap up your paper.

Drafting Your Term Paper

• Writing an introduction can be challenging, but don’t get too caught up on it. As you write the rest of your paper, your arguments might change and develop, so you’ll likely need to rewrite your intro at the end, anyway. Writing your intro is simply a means of getting started and you can always revise it later. [10] X Trustworthy Source PubMed Central Journal archive from the U.S. National Institutes of Health Go to source
• Be sure to define any words your readers might not understand. For example, words like “globalization” have many different meanings depending on context, and it’s important to state which ones you’ll be using as part of your introductory paragraph.

• Try to relate the subject of the essay (say, Plato’s Symposium ) to a tangentially related issue you happen to know something about (say, the growing trend of free-wheeling hookups in frat parties). Slowly bring the paragraph around to your actual subject and make a few generalizations about why this aspect of the book/subject is so fascinating and worthy of study (such as how different the expectations for physical intimacy were then compared to now).

• You can also reflect on your own experience of researching and writing your term paper. Discuss how your understanding of your topic evolved and any unexpected findings you came across.

• While peppering quotes throughout your text is a good way to help make your point, don’t overdo it. If you use too many quotes, you’re basically allowing other authors to make the point and write the paper for you. When you do use a quote, be sure to explain why it is relevant in your own words.
• Try to sort out your bibliography at the beginning of your writing process to avoid having a last-minute scramble. When you have all the information beforehand (like the source’s title, author, publication date, etc.), it’s easier to plug them into the correct format.

Revising & Finalizing Your Term Paper

• Trade in weak “to-be” verbs for stronger “action” verbs. For example: “I was writing my term paper” becomes “I wrote my term paper.”

• It’s extremely important to proofread your term paper. If your writing is full of mistakes, your instructor will assume you didn’t put much effort into your paper. If you have too many errors, your message will be lost in the confusion of trying to understand what you’ve written.

• If you add or change information to make things clearer for your readers, it’s a good idea to look over your paper one more time to catch any new typos that may have come up in the process.

• The best essays are like grass court tennis—the argument should flow in a "rally" style, building persuasively to the conclusion. Thanks Helpful 1 Not Helpful 0
• If you get stuck, consider giving your professor a visit. Whether you're still struggling for a thesis or you want to go over your conclusion, most instructors are delighted to help and they'll remember your initiative when grading time rolls around. Thanks Helpful 0 Not Helpful 0
• At least 2 hours for 3-5 pages.
• At least 4 hours for 8-10 pages.
• At least 6 hours for 12-15 pages.
• Double those hours if you haven't done any homework and you haven't attended class.
• For papers that are primarily research-based, add about two hours to those times (although you'll need to know how to research quickly and effectively, beyond the purview of this brief guide).

You Might Also Like

• ↑ https://www.binghamton.edu/counseling/self-help/term-paper.html
• ↑ Matthew Snipp, PhD. Research Fellow, U.S. Bureau of the Census. Expert Interview. 26 March 2020.
• ↑ https://emory.libanswers.com/faq/44525
• ↑ https://writing.wisc.edu/handbook/assignments/planresearchpaper/
• ↑ https://owl.purdue.edu/owl/general_writing/the_writing_process/thesis_statement_tips.html
• ↑ https://libguides.usc.edu/writingguide/outline
• ↑ https://gallaudet.edu/student-success/tutorial-center/english-center/writing/guide-to-writing-introductions-and-conclusions/
• ↑ https://www.ncbi.nlm.nih.gov/pubmed/26731827
• ↑ https://writing.wisc.edu/handbook/assignments/writing-an-abstract-for-your-research-paper/
• ↑ https://www.ivcc.edu/stylesite/Essay_Title.pdf
• ↑ https://www.uni-flensburg.de/fileadmin/content/institute/anglistik/dokumente/downloads/how-to-write-a-term-paper-daewes.pdf
• ↑ https://library.sacredheart.edu/c.php?g=29803&p=185937
• ↑ https://www.cornerstone.edu/blog-post/six-steps-to-really-edit-your-paper/

About This Article

If you need to write a term paper, choose your topic, then start researching that topic. Use your research to craft a thesis statement which states the main idea of your paper, then organize all of your facts into an outline that supports your thesis. Once you start writing, state your thesis in the first paragraph, then use the body of the paper to present the points that support your argument. End the paper with a strong conclusion that restates your thesis. For tips on improving your term paper through active voice, read on! Did this summary help you? Yes No

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Home » Term Paper – Format, Examples and Writing Guide

Term Paper – Format, Examples and Writing Guide

Table of Contents

Definition:

Term paper is a type of academic writing assignment that is typically assigned to students at the end of a semester or term. It is usually a research-based paper that is meant to demonstrate the student’s understanding of a particular topic, as well as their ability to analyze and synthesize information from various sources.

Term papers are usually longer than other types of academic writing assignments and can range anywhere from 5 to 20 pages or more, depending on the level of study and the specific requirements of the assignment. They often require extensive research and the use of a variety of sources, including books, articles, and other academic publications.

Term Paper Format

The format of a term paper may vary depending on the specific requirements of your professor or institution. However, a typical term paper usually consists of the following sections:

• Title page: This should include the title of your paper, your name, the course name and number, your instructor’s name, and the date.
• Abstract : This is a brief summary of your paper, usually no more than 250 words. It should provide an overview of your topic, the research question or hypothesis, your methodology, and your main findings or conclusions.
• Introduction : This section should introduce your topic and provide background information on the subject. You should also state your research question or hypothesis and explain the importance of your research.
• Literature review : This section should review the existing literature on your topic. You should summarize the key findings and arguments made by other scholars and identify any gaps in the literature that your research aims to address.
• Methodology: This section should describe the methods you used to collect and analyze your data. You should explain your research design, sampling strategy, data collection methods, and data analysis techniques.
• Results : This section should present your findings. You can use tables, graphs, and charts to illustrate your data.
• Discussion : This section should interpret your findings and explain what they mean in relation to your research question or hypothesis. You should also discuss any limitations of your study and suggest areas for future research.
• Conclusion : This section should summarize your main findings and conclusions. You should also restate the importance of your research and its implications for the field.
• References : This section should list all the sources you cited in your paper using a specific citation style (e.g., APA, MLA, Chicago).
• Appendices : This section should include any additional materials that are relevant to your study but not essential to your main argument (e.g., survey questions, interview transcripts).

Structure of Term Paper

Here’s an example structure for a term paper:

I. Introduction

A. Background information on the topic

B. Thesis statement

II. Literature Review

A. Overview of current literature on the topic

B. Discussion of key themes and findings from literature

C. Identification of gaps in current literature

III. Methodology

A. Description of research design

B. Discussion of data collection methods

C. Explanation of data analysis techniques

IV. Results

A. Presentation of findings

B. Analysis and interpretation of results

C. Comparison of results with previous studies

V. Discussion

A. Summary of key findings

B. Explanation of how results address the research questions

C. Implications of results for the field

VI. Conclusion

A. Recap of key points

B. Significance of findings

C. Future directions for research

VII. References

A. List of sources cited in the paper

How to Write Term Paper

Here are some steps to help you write a term paper:

• Choose a topic: Choose a topic that interests you and is relevant to your course. If your professor has assigned a topic, make sure you understand it and clarify any doubts before you start.
• Research : Conduct research on your topic by gathering information from various sources such as books, academic journals, and online resources. Take notes and organize your information systematically.
• Create an outline : Create an outline of your term paper by arranging your ideas and information in a logical sequence. Your outline should include an introduction, body paragraphs, and a conclusion.
• Write a thesis statement: Write a clear and concise thesis statement that states the main idea of your paper. Your thesis statement should be included in your introduction.
• Write the introduction: The introduction should grab the reader’s attention, provide background information on your topic, and introduce your thesis statement.
• Write the body : The body of your paper should provide supporting evidence for your thesis statement. Use your research to provide details and examples to support your argument. Make sure to organize your ideas logically and use transition words to connect paragraphs.
• Write the conclusion : The conclusion should summarize your main points and restate your thesis statement. Avoid introducing new information in the conclusion.
• Edit and proofread: Edit and proofread your term paper carefully to ensure that it is free of errors and flows smoothly. Check for grammar, spelling, and punctuation errors.
• Format and cite your sources: Follow the formatting guidelines provided by your professor and cite your sources properly using the appropriate citation style.
• Submit your paper : Submit your paper on time and according to the instructions provided by your professor.

Term Paper Example

Here’s an example of a term paper:

Title : The Role of Artificial Intelligence in Cybersecurity

As the world becomes more digitally interconnected, cybersecurity threats are increasing in frequency and sophistication. Traditional security measures are no longer enough to protect against these threats. This paper explores the role of artificial intelligence (AI) in cybersecurity, including how AI can be used to detect and respond to threats in real-time, the challenges of implementing AI in cybersecurity, and the potential ethical implications of AI-powered security systems. The paper concludes with recommendations for organizations looking to integrate AI into their cybersecurity strategies.

Introduction :

The increasing number of cybersecurity threats in recent years has led to a growing interest in the potential of artificial intelligence (AI) to improve cybersecurity. AI has the ability to analyze vast amounts of data and identify patterns and anomalies that may indicate a security breach. Additionally, AI can automate responses to threats, allowing for faster and more effective mitigation of security incidents. However, there are also challenges associated with implementing AI in cybersecurity, such as the need for large amounts of high-quality data, the potential for AI systems to make mistakes, and the ethical considerations surrounding the use of AI in security.

Literature Review:

This section of the paper reviews existing research on the use of AI in cybersecurity. It begins by discussing the types of AI techniques used in cybersecurity, including machine learning, natural language processing, and neural networks. The literature review then explores the advantages of using AI in cybersecurity, such as its ability to detect previously unknown threats and its potential to reduce the workload of security analysts. However, the review also highlights some of the challenges associated with implementing AI in cybersecurity, such as the need for high-quality training data and the potential for AI systems to be fooled by sophisticated attacks.

Methodology :

To better understand the challenges and opportunities associated with using AI in cybersecurity, this paper conducted a survey of cybersecurity professionals working in a variety of industries. The survey included questions about the types of AI techniques used in their organizations, the challenges they faced when implementing AI in cybersecurity, and their perceptions of the ethical implications of using AI in security.

The results of the survey showed that while many organizations are interested in using AI in cybersecurity, they face several challenges when implementing these systems. These challenges include the need for high-quality training data, the potential for AI systems to be fooled by sophisticated attacks, and the difficulty of integrating AI with existing security systems. Additionally, many respondents expressed concerns about the ethical implications of using AI in security, such as the potential for AI to be biased or to make decisions that are harmful to individuals or society as a whole.

Discussion :

Based on the results of the survey and the existing literature, this paper discusses the potential benefits and risks of using AI in cybersecurity. It also provides recommendations for organizations looking to integrate AI into their security strategies, such as the need to prioritize data quality and to ensure that AI systems are transparent and accountable.

Conclusion :

While there are challenges associated with implementing AI in cybersecurity, the potential benefits of using these systems are significant. AI can help organizations detect and respond to threats more quickly and effectively, reducing the risk of security breaches. However, it is important for organizations to be aware of the potential ethical implications of using AI in security and to take steps to ensure that these systems are transparent and accountable.

References:

• Alkhaldi, S., Al-Daraiseh, A., & Lutfiyya, H. (2019). A Survey on Artificial Intelligence Techniques in Cyber Security. Journal of Information Security, 10(03), 191-207.
• Gartner. (2019). Gartner Top 10 Strategic Technology Trends for 2020. Retrieved from https://www.gartner.com/smarterwithgartner/gartner-top-10-strategic-technology-trends-for-2020/
• Kshetri, N. (2018). Blockchain’s roles in meeting key supply chain management objectives. International Journal of Information Management, 39, 80-89.
• Lipton, Z. C. (2018). The mythos of model interpretability. arXiv preprint arXiv:1606.03490.
• Schneier, B. (2019). Click Here to Kill Everybody: Security and Survival in a Hyper-Connected World. WW Norton & Company.
• Wahab, M. A., Rahman, M. S., & Islam, M. R. (2020). A Survey on AI Techniques in Cybersecurity. International Journal of Scientific & Engineering Research, 11(2), 22-27.

When to Write Term Paper

A term paper is usually a lengthy research paper that is assigned to students at the end of a term or semester. There are several situations when writing a term paper may be required, including:

• As a course requirement: In most cases, a term paper is required as part of the coursework for a particular course. It may be assigned by the instructor as a way of assessing the student’s understanding of the course material.
• To explore a specific topic : A term paper can be an excellent opportunity for students to explore a specific topic of interest in-depth. It allows them to conduct extensive research on the topic and develop their understanding of it.
• To develop critical thinking skills : Writing a term paper requires students to engage in critical thinking and analysis. It helps them to develop their ability to evaluate and interpret information, as well as to present their ideas in a clear and coherent manner.
• To prepare for future academic or professional pursuits: Writing a term paper can be an excellent way for students to prepare for future academic or professional pursuits. It can help them to develop the research and writing skills necessary for success in higher education or in a professional career.

Purpose of Term Paper

The main purposes of a term paper are:

• Demonstrate mastery of a subject: A term paper provides an opportunity for students to showcase their knowledge and understanding of a particular subject. It requires students to research and analyze the topic, and then present their findings in a clear and organized manner.
• Develop critical thinking skills: Writing a term paper requires students to think critically about their subject matter, analyzing various sources and viewpoints, and evaluating evidence to support their arguments.
• Improve writing skills : Writing a term paper helps students improve their writing skills, including organization, clarity, and coherence. It also requires them to follow specific formatting and citation guidelines, which can be valuable skills for future academic and professional endeavors.
• Contribute to academic discourse : A well-written term paper can contribute to academic discourse by presenting new insights, ideas, and arguments that add to the existing body of knowledge on a particular topic.
• Prepare for future research : Writing a term paper can help prepare students for future research, by teaching them how to conduct a literature review, evaluate sources, and formulate research questions and hypotheses. It can also help them develop research skills that they can apply in future academic or professional endeavors.

Advantages of Term Paper

There are several advantages of writing a term paper, including:

• In-depth exploration: Writing a term paper allows you to delve deeper into a specific topic, allowing you to gain a more comprehensive understanding of the subject matter.
• Improved writing skills: Writing a term paper involves extensive research, critical thinking, and the organization of ideas into a cohesive written document. As a result, writing a term paper can improve your writing skills significantly.
• Demonstration of knowledge: A well-written term paper demonstrates your knowledge and understanding of the subject matter, which can be beneficial for academic or professional purposes.
• Development of research skills : Writing a term paper requires conducting thorough research, analyzing data, and synthesizing information from various sources. This process can help you develop essential research skills that can be applied in many other areas.
• Enhancement of critical thinking : Writing a term paper encourages you to think critically, evaluate information, and develop well-supported arguments. These skills can be useful in many areas of life, including personal and professional decision-making.
• Preparation for further academic work : Writing a term paper is excellent preparation for more extensive academic projects, such as a thesis or dissertation.

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College Term Paper

🖋 best way to write a great college term paper, term paper about market structure.

Market Structure Term Paper:

Market structure in economics is the number of companies which produce the identical goods and services and form a sector of the market. The market consists of numerous sectors, and one can imagine the number when thinks about the quantity and variety of products sold there. The market structure is quite a complicated formation, because every sector is connected with the other one and the groups of products on the common sector of the market compete with one another with purpose to attract as many consumers as possible. There are several types of market structure and every type is characterized with its specific qualities and features. The first type of the market structure is the fair competition. The sector consists of a great number of firms every of which has its own part of the market. The next type is oligopoly. It is characterized with the fact that a small number of the big corporations share the sector of the market and control it firmly.

Duopoly is the type of the structure consisting of two companies which control the whole sector of the market together. Monopoly is the kind of the market structure which is characterized with the single company which controls the whole sector of the market and does not have any serious rivals. There are many other kinds of market structures and it is obvious that the type depends on the quantity of the participants on the sector of the market. The type of market structure influences the quality and price of the production. If the competition is high, the price will reduce, if the number of the firms is low, the price will grow.

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Market structure is a serious topic for the analysis and the student has the chance to demonstrate his knowledge and the ability to analyze things in the appropriate way. A term paper is a big in volume assignment which tests student’s knowledge, so one should prepare a good term paper or essay to receive the highest grades. A good term paper should contain the information about the market structure, the types of market structure, its components, the factors which influence the condition on the market and advantages and disadvantages of every market structure.

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McKinsey Global Private Markets Review 2024: Private markets in a slower era

At a glance, macroeconomic challenges continued.

McKinsey Global Private Markets Review 2024: Private markets: A slower era

If 2022 was a tale of two halves, with robust fundraising and deal activity in the first six months followed by a slowdown in the second half, then 2023 might be considered a tale of one whole. Macroeconomic headwinds persisted throughout the year, with rising financing costs, and an uncertain growth outlook taking a toll on private markets. Full-year fundraising continued to decline from 2021’s lofty peak, weighed down by the “denominator effect” that persisted in part due to a less active deal market. Managers largely held onto assets to avoid selling in a lower-multiple environment, fueling an activity-dampening cycle in which distribution-starved limited partners (LPs) reined in new commitments.

About the authors

This article is a summary of a larger report, available as a PDF, that is a collaborative effort by Fredrik Dahlqvist , Alastair Green , Paul Maia, Alexandra Nee , David Quigley , Aditya Sanghvi , Connor Mangan, John Spivey, Rahel Schneider, and Brian Vickery , representing views from McKinsey’s Private Equity & Principal Investors Practice.

Performance in most private asset classes remained below historical averages for a second consecutive year. Decade-long tailwinds from low and falling interest rates and consistently expanding multiples seem to be things of the past. As private market managers look to boost performance in this new era of investing, a deeper focus on revenue growth and margin expansion will be needed now more than ever.

Perspectives on a slower era in private markets

Global fundraising contracted.

Fundraising fell 22 percent across private market asset classes globally to just over $1 trillion, as of year-end reported data—the lowest total since 2017. Fundraising in North America, a rare bright spot in 2022, declined in line with global totals, while in Europe, fundraising proved most resilient, falling just 3 percent. In Asia, fundraising fell precipitously and now sits 72 percent below the region’s 2018 peak.

Despite difficult fundraising conditions, headwinds did not affect all strategies or managers equally. Private equity (PE) buyout strategies posted their best fundraising year ever, and larger managers and vehicles also fared well, continuing the prior year’s trend toward greater fundraising concentration.

The numerator effect persisted

Despite a marked recovery in the denominator—the 1,000 largest US retirement funds grew 7 percent in the year ending September 2023, after falling 14 percent the prior year, for example 1 “U.S. retirement plans recover half of 2022 losses amid no-show recession,” Pensions and Investments , February 12, 2024. —many LPs remain overexposed to private markets relative to their target allocations. LPs started 2023 overweight: according to analysis from CEM Benchmarking, average allocations across PE, infrastructure, and real estate were at or above target allocations as of the beginning of the year. And the numerator grew throughout the year, as a lack of exits and rebounding valuations drove net asset values (NAVs) higher. While not all LPs strictly follow asset allocation targets, our analysis in partnership with global private markets firm StepStone Group suggests that an overallocation of just one percentage point can reduce planned commitments by as much as 10 to 12 percent per year for five years or more.

Despite these headwinds, recent surveys indicate that LPs remain broadly committed to private markets. In fact, the majority plan to maintain or increase allocations over the medium to long term.

Investors fled to known names and larger funds

Fundraising concentration reached its highest level in over a decade, as investors continued to shift new commitments in favor of the largest fund managers. The 25 most successful fundraisers collected 41 percent of aggregate commitments to closed-end funds (with the top five managers accounting for nearly half that total). Closed-end fundraising totals may understate the extent of concentration in the industry overall, as the largest managers also tend to be more successful in raising non-institutional capital.

While the largest funds grew even larger—the largest vehicles on record were raised in buyout, real estate, infrastructure, and private debt in 2023—smaller and newer funds struggled. Fewer than 1,700 funds of less than $1 billion were closed during the year, half as many as closed in 2022 and the fewest of any year since 2012. New manager formation also fell to the lowest level since 2012, with just 651 new firms launched in 2023.

Whether recent fundraising concentration and a spate of M&A activity signals the beginning of oft-rumored consolidation in the private markets remains uncertain, as a similar pattern developed in each of the last two fundraising downturns before giving way to renewed entrepreneurialism among general partners (GPs) and commitment diversification among LPs. Compared with how things played out in the last two downturns, perhaps this movie really is different, or perhaps we’re watching a trilogy reusing a familiar plotline.

Dry powder inventory spiked (again)

Private markets assets under management totaled $13.1 trillion as of June 30, 2023, and have grown nearly 20 percent per annum since 2018. Dry powder reserves—the amount of capital committed but not yet deployed—increased to $3.7 trillion, marking the ninth consecutive year of growth. Dry powder inventory—the amount of capital available to GPs expressed as a multiple of annual deployment—increased for the second consecutive year in PE, as new commitments continued to outpace deal activity. Inventory sat at 1.6 years in 2023, up markedly from the 0.9 years recorded at the end of 2021 but still within the historical range. NAV grew as well, largely driven by the reluctance of managers to exit positions and crystallize returns in a depressed multiple environment.

Private equity strategies diverged

Buyout and venture capital, the two largest PE sub-asset classes, charted wildly different courses over the past 18 months. Buyout notched its highest fundraising year ever in 2023, and its performance improved, with funds posting a (still paltry) 5 percent net internal rate of return through September 30. And although buyout deal volumes declined by 19 percent, 2023 was still the third-most-active year on record. In contrast, venture capital (VC) fundraising declined by nearly 60 percent, equaling its lowest total since 2015, and deal volume fell by 36 percent to the lowest level since 2019. VC funds returned –3 percent through September, posting negative returns for seven consecutive quarters. VC was the fastest-growing—as well as the highest-performing—PE strategy by a significant margin from 2010 to 2022, but investors appear to be reevaluating their approach in the current environment.

Private equity entry multiples contracted

PE buyout entry multiples declined by roughly one turn from 11.9 to 11.0 times EBITDA, slightly outpacing the decline in public market multiples (down from 12.1 to 11.3 times EBITDA), through the first nine months of 2023. For nearly a decade leading up to 2022, managers consistently sold assets into a higher-multiple environment than that in which they had bought those assets, providing a substantial performance tailwind for the industry. Nowhere has this been truer than in technology. After experiencing more than eight turns of multiple expansion from 2009 to 2021 (the most of any sector), technology multiples have declined by nearly three turns in the past two years, 50 percent more than in any other sector. Overall, roughly two-thirds of the total return for buyout deals that were entered in 2010 or later and exited in 2021 or before can be attributed to market multiple expansion and leverage. Now, with falling multiples and higher financing costs, revenue growth and margin expansion are taking center stage for GPs.

Real estate receded

Demand uncertainty, slowing rent growth, and elevated financing costs drove cap rates higher and made price discovery challenging, all of which weighed on deal volume, fundraising, and investment performance. Global closed-end fundraising declined 34 percent year over year, and funds returned −4 percent in the first nine months of the year, losing money for the first time since the 2007–08 global financial crisis. Capital shifted away from core and core-plus strategies as investors sought liquidity via redemptions in open-end vehicles, from which net outflows reached their highest level in at least two decades. Opportunistic strategies benefited from this shift, with investors focusing on capital appreciation over income generation in a market where alternative sources of yield have grown more attractive. Rising interest rates widened bid–ask spreads and impaired deal volume across food groups, including in what were formerly hot sectors: multifamily and industrial.

Private debt pays dividends

Debt again proved to be the most resilient private asset class against a turbulent market backdrop. Fundraising declined just 13 percent, largely driven by lower commitments to direct lending strategies, for which a slower PE deal environment has made capital deployment challenging. The asset class also posted the highest returns among all private asset classes through September 30. Many private debt securities are tied to floating rates, which enhance returns in a rising-rate environment. Thus far, managers appear to have successfully navigated the rising incidence of default and distress exhibited across the broader leveraged-lending market. Although direct lending deal volume declined from 2022, private lenders financed an all-time high 59 percent of leveraged buyout transactions last year and are now expanding into additional strategies to drive the next era of growth.

Infrastructure took a detour

After several years of robust growth and strong performance, infrastructure and natural resources fundraising declined by 53 percent to the lowest total since 2013. Supply-side timing is partially to blame: five of the seven largest infrastructure managers closed a flagship vehicle in 2021 or 2022, and none of those five held a final close last year. As in real estate, investors shied away from core and core-plus investments in a higher-yield environment. Yet there are reasons to believe infrastructure’s growth will bounce back. Limited partners (LPs) surveyed by McKinsey remain bullish on their deployment to the asset class, and at least a dozen vehicles targeting more than $10 billion were actively fundraising as of the end of 2023. Multiple recent acquisitions of large infrastructure GPs by global multi-asset-class managers also indicate marketwide conviction in the asset class’s potential.

Private markets still have work to do on diversity

Private markets firms are slowly improving their representation of females (up two percentage points over the prior year) and ethnic and racial minorities (up one percentage point). On some diversity metrics, including entry-level representation of women, private markets now compare favorably with corporate America. Yet broad-based parity remains elusive and too slow in the making. Ethnic, racial, and gender imbalances are particularly stark across more influential investing roles and senior positions. In fact, McKinsey’s research  reveals that at the current pace, it would take several decades for private markets firms to reach gender parity at senior levels. Increasing representation across all levels will require managers to take fresh approaches to hiring, retention, and promotion.

Artificial intelligence generating excitement

The transformative potential of generative AI was perhaps 2023’s hottest topic (beyond Taylor Swift). Private markets players are excited about the potential for the technology to optimize their approach to thesis generation, deal sourcing, investment due diligence, and portfolio performance, among other areas. While the technology is still nascent and few GPs can boast scaled implementations, pilot programs are already in flight across the industry, particularly within portfolio companies. Adoption seems nearly certain to accelerate throughout 2024.

Private markets in a slower era

If private markets investors entered 2023 hoping for a return to the heady days of 2021, they likely left the year disappointed. Many of the headwinds that emerged in the latter half of 2022 persisted throughout the year, pressuring fundraising, dealmaking, and performance. Inflation moderated somewhat over the course of the year but remained stubbornly elevated by recent historical standards. Interest rates started high and rose higher, increasing the cost of financing. A reinvigorated public equity market recovered most of 2022’s losses but did little to resolve the valuation uncertainty private market investors have faced for the past 18 months.

Within private markets, the denominator effect remained in play, despite the public market recovery, as the numerator continued to expand. An activity-dampening cycle emerged: higher cost of capital and lower multiples limited the ability or willingness of general partners (GPs) to exit positions; fewer exits, coupled with continuing capital calls, pushed LP allocations higher, thereby limiting their ability or willingness to make new commitments. These conditions weighed on managers’ ability to fundraise. Based on data reported as of year-end 2023, private markets fundraising fell 22 percent from the prior year to just over $1 trillion, the largest such drop since 2009 (Exhibit 1).

The impact of the fundraising environment was not felt equally among GPs. Continuing a trend that emerged in 2022, and consistent with prior downturns in fundraising, LPs favored larger vehicles and the scaled GPs that typically manage them. Smaller and newer managers struggled, and the number of sub–$1 billion vehicles and new firm launches each declined to its lowest level in more than a decade.

Despite the decline in fundraising, private markets assets under management (AUM) continued to grow, increasing 12 percent to $13.1 trillion as of June 30, 2023. 2023 fundraising was still the sixth-highest annual haul on record, pushing dry powder higher, while the slowdown in deal making limited distributions.

Investment performance across private market asset classes fell short of historical averages. Private equity (PE) got back in the black but generated the lowest annual performance in the past 15 years, excluding 2022. Closed-end real estate produced negative returns for the first time since 2009, as capitalization (cap) rates expanded across sectors and rent growth dissipated in formerly hot sectors, including multifamily and industrial. The performance of infrastructure funds was less than half of its long-term average and even further below the double-digit returns generated in 2021 and 2022. Private debt was the standout performer (if there was one), outperforming all other private asset classes and illustrating the asset class’s countercyclical appeal.

Private equity down but not out

Higher financing costs, lower multiples, and an uncertain macroeconomic environment created a challenging backdrop for private equity managers in 2023. Fundraising declined for the second year in a row, falling 15 percent to $649 billion, as LPs grappled with the denominator effect and a slowdown in distributions. Managers were on the fundraising trail longer to raise this capital: funds that closed in 2023 were open for a record-high average of 20.1 months, notably longer than 18.7 months in 2022 and 14.1 months in 2018. VC and growth equity strategies led the decline, dropping to their lowest level of cumulative capital raised since 2015. Fundraising in Asia fell for the fourth year of the last five, with the greatest decline in China.

Despite the difficult fundraising context, a subset of strategies and managers prevailed. Buyout managers collectively had their best fundraising year on record, raising more than $400 billion. Fundraising in Europe surged by more than 50 percent, resulting in the region’s biggest haul ever. The largest managers raised an outsized share of the total for a second consecutive year, making 2023 the most concentrated fundraising year of the last decade (Exhibit 2).

Despite the drop in aggregate fundraising, PE assets under management increased 8 percent to $8.2 trillion. Only a small part of this growth was performance driven: PE funds produced a net IRR of just 2.5 percent through September 30, 2023. Buyouts and growth equity generated positive returns, while VC lost money. PE performance, dating back to the beginning of 2022, remains negative, highlighting the difficulty of generating attractive investment returns in a higher interest rate and lower multiple environment. As PE managers devise value creation strategies to improve performance, their focus includes ensuring operating efficiency and profitability of their portfolio companies.

Deal activity volume and count fell sharply, by 21 percent and 24 percent, respectively, which continued the slower pace set in the second half of 2022. Sponsors largely opted to hold assets longer rather than lock in underwhelming returns. While higher financing costs and valuation mismatches weighed on overall deal activity, certain types of M&A gained share. Add-on deals, for example, accounted for a record 46 percent of total buyout deal volume last year.

Real estate recedes

For real estate, 2023 was a year of transition, characterized by a litany of new and familiar challenges. Pandemic-driven demand issues continued, while elevated financing costs, expanding cap rates, and valuation uncertainty weighed on commercial real estate deal volumes, fundraising, and investment performance.

Managers faced one of the toughest fundraising environments in many years. Global closed-end fundraising declined 34 percent to $125 billion. While fundraising challenges were widespread, they were not ubiquitous across strategies. Dollars continued to shift to large, multi-asset class platforms, with the top five managers accounting for 37 percent of aggregate closed-end real estate fundraising. In April, the largest real estate fund ever raised closed on a record $30 billion.

Capital shifted away from core and core-plus strategies as investors sought liquidity through redemptions in open-end vehicles and reduced gross contributions to the lowest level since 2009. Opportunistic strategies benefited from this shift, as investors turned their attention toward capital appreciation over income generation in a market where alternative sources of yield have grown more attractive.

In the United States, for instance, open-end funds, as represented by the National Council of Real Estate Investment Fiduciaries Fund Index—Open-End Equity (NFI-OE), recorded $13 billion in net outflows in 2023, reversing the trend of positive net inflows throughout the 2010s. The negative flows mainly reflected $9 billion in core outflows, with core-plus funds accounting for the remaining outflows, which reversed a 20-year run of net inflows.

As a result, the NAV in US open-end funds fell roughly 16 percent year over year. Meanwhile, global assets under management in closed-end funds reached a new peak of $1.7 trillion as of June 2023, growing 14 percent between June 2022 and June 2023.

Real estate underperformed historical averages in 2023, as previously high-performing multifamily and industrial sectors joined office in producing negative returns caused by slowing demand growth and cap rate expansion. Closed-end funds generated a pooled net IRR of −3.5 percent in the first nine months of 2023, losing money for the first time since the global financial crisis. The lone bright spot among major sectors was hospitality, which—thanks to a rush of postpandemic travel—returned 10.3 percent in 2023. 2 Based on NCREIFs NPI index. Hotels represent 1 percent of total properties in the index. As a whole, the average pooled lifetime net IRRs for closed-end real estate funds from 2011–20 vintages remained around historical levels (9.8 percent).

Global deal volume declined 47 percent in 2023 to reach a ten-year low of $650 billion, driven by widening bid–ask spreads amid valuation uncertainty and higher costs of financing (Exhibit 3). 3 CBRE, Real Capital Analytics Deal flow in the office sector remained depressed, partly as a result of continued uncertainty in the demand for space in a hybrid working world.

During a turbulent year for private markets, private debt was a relative bright spot, topping private markets asset classes in terms of fundraising growth, AUM growth, and performance.

Fundraising for private debt declined just 13 percent year over year, nearly ten percentage points less than the private markets overall. Despite the decline in fundraising, AUM surged 27 percent to $1.7 trillion. And private debt posted the highest investment returns of any private asset class through the first three quarters of 2023.

Private debt’s risk/return characteristics are well suited to the current environment. With interest rates at their highest in more than a decade, current yields in the asset class have grown more attractive on both an absolute and relative basis, particularly if higher rates sustain and put downward pressure on equity returns (Exhibit 4). The built-in security derived from debt’s privileged position in the capital structure, moreover, appeals to investors that are wary of market volatility and valuation uncertainty.

Direct lending continued to be the largest strategy in 2023, with fundraising for the mostly-senior-debt strategy accounting for almost half of the asset class’s total haul (despite declining from the previous year). Separately, mezzanine debt fundraising hit a new high, thanks to the closings of three of the largest funds ever raised in the strategy.

Over the longer term, growth in private debt has largely been driven by institutional investors rotating out of traditional fixed income in favor of private alternatives. Despite this growth in commitments, LPs remain underweight in this asset class relative to their targets. In fact, the allocation gap has only grown wider in recent years, a sharp contrast to other private asset classes, for which LPs’ current allocations exceed their targets on average. According to data from CEM Benchmarking, the private debt allocation gap now stands at 1.4 percent, which means that, in aggregate, investors must commit hundreds of billions in net new capital to the asset class just to reach current targets.

Private debt was not completely immune to the macroeconomic conditions last year, however. Fundraising declined for the second consecutive year and now sits 23 percent below 2021’s peak. Furthermore, though private lenders took share in 2023 from other capital sources, overall deal volumes also declined for the second year in a row. The drop was largely driven by a less active PE deal environment: private debt is predominantly used to finance PE-backed companies, though managers are increasingly diversifying their origination capabilities to include a broad new range of companies and asset types.

Infrastructure and natural resources take a detour

For infrastructure and natural resources fundraising, 2023 was an exceptionally challenging year. Aggregate capital raised declined 53 percent year over year to $82 billion, the lowest annual total since 2013. The size of the drop is particularly surprising in light of infrastructure’s recent momentum. The asset class had set fundraising records in four of the previous five years, and infrastructure is often considered an attractive investment in uncertain markets.

While there is little doubt that the broader fundraising headwinds discussed elsewhere in this report affected infrastructure and natural resources fundraising last year, dynamics specific to the asset class were at play as well. One issue was supply-side timing: nine of the ten largest infrastructure GPs did not close a flagship fund in 2023. Second was the migration of investor dollars away from core and core-plus investments, which have historically accounted for the bulk of infrastructure fundraising, in a higher rate environment.

The asset class had some notable bright spots last year. Fundraising for higher-returning opportunistic strategies more than doubled the prior year’s total (Exhibit 5). AUM grew 18 percent, reaching a new high of $1.5 trillion. Infrastructure funds returned a net IRR of 3.4 percent in 2023; this was below historical averages but still the second-best return among private asset classes. And as was the case in other asset classes, investors concentrated commitments in larger funds and managers in 2023, including in the largest infrastructure fund ever raised.

The outlook for the asset class, moreover, remains positive. Funds targeting a record amount of capital were in the market at year-end, providing a robust foundation for fundraising in 2024 and 2025. A recent spate of infrastructure GP acquisitions signal multi-asset managers’ long-term conviction in the asset class, despite short-term headwinds. Global megatrends like decarbonization and digitization, as well as revolutions in energy and mobility, have spurred new infrastructure investment opportunities around the world, particularly for value-oriented investors that are willing to take on more risk.

Private markets make measured progress in DEI

Diversity, equity, and inclusion (DEI) has become an important part of the fundraising, talent, and investing landscape for private market participants. Encouragingly, incremental progress has been made in recent years, including more diverse talent being brought to entry-level positions, investing roles, and investment committees. The scope of DEI metrics provided to institutional investors during fundraising has also increased in recent years: more than half of PE firms now provide data across investing teams, portfolio company boards, and portfolio company management (versus investment team data only). 4 “ The state of diversity in global private markets: 2023 ,” McKinsey, August 22, 2023.

In 2023, McKinsey surveyed 66 global private markets firms that collectively employ more than 60,000 people for the second annual State of diversity in global private markets report. 5 “ The state of diversity in global private markets: 2023 ,” McKinsey, August 22, 2023. The research offers insight into the representation of women and ethnic and racial minorities in private investing as of year-end 2022. In this chapter, we discuss where the numbers stand and how firms can bring a more diverse set of perspectives to the table.

The statistics indicate signs of modest advancement. Overall representation of women in private markets increased two percentage points to 35 percent, and ethnic and racial minorities increased one percentage point to 30 percent (Exhibit 6). Entry-level positions have nearly reached gender parity, with female representation at 48 percent. The share of women holding C-suite roles globally increased 3 percentage points, while the share of people from ethnic and racial minorities in investment committees increased 9 percentage points. There is growing evidence that external hiring is gradually helping close the diversity gap, especially at senior levels. For example, 33 percent of external hires at the managing director level were ethnic or racial minorities, higher than their existing representation level (19 percent).

Yet, the scope of the challenge remains substantial. Women and minorities continue to be underrepresented in senior positions and investing roles. They also experience uneven rates of progress due to lower promotion and higher attrition rates, particularly at smaller firms. Firms are also navigating an increasingly polarized workplace today, with additional scrutiny and a growing number of lawsuits against corporate diversity and inclusion programs, particularly in the US, which threatens to impact the industry’s pace of progress.

Fredrik Dahlqvist is a senior partner in McKinsey’s Stockholm office; Alastair Green  is a senior partner in the Washington, DC, office, where Paul Maia and Alexandra Nee  are partners; David Quigley  is a senior partner in the New York office, where Connor Mangan is an associate partner and Aditya Sanghvi  is a senior partner; Rahel Schneider is an associate partner in the Bay Area office; John Spivey is a partner in the Charlotte office; and Brian Vickery  is a partner in the Boston office.

The authors wish to thank Jonathan Christy, Louis Dufau, Vaibhav Gujral, Graham Healy-Day, Laura Johnson, Ryan Luby, Tripp Norton, Alastair Rami, Henri Torbey, and Alex Wolkomir for their contributions

The authors would also like to thank CEM Benchmarking and the StepStone Group for their partnership in this year's report.

This article was edited by Arshiya Khullar, an editor in the Gurugram office.

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