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Terms in this set (22)
cartel agreements, price-fixing agreements, market division, group boycotts, information exchanges and other facilitating practices, joint ventures, and other ancillary restraints
naked price-fixing agreement that is usually conduct in secret
Theater Enterprises, Inc. v. Paramount (1954)
held that mere parallel behavior, including conscious parallelism was not enough to constitute agreement under Section 1
Interstate Circuit, Inc. v. US (1939)
Explicit agreement is not required; tacit agreement may suffice.
factors used to differentiate between tacit agreement and mere conscious parallelism. evidence "tending to exclude the possibility of independent action."
two prongs of plus factors
1) evidence that the alleged conspirators were "motivated" to enter into a conspiracy and 2) evidence that the alleged conspirators acted contrary to their economic interests
found when the idea of collusion has been suggested to, or clearly considered by, the alleged conspirators. Satisfied by evidence that the alleged conspirators had conversations about possible collaborative pricing, that an executive spoke @ a trade convention and suggested that all firms raise prices, that competitors exchanged sensitive pricing information
action against economic self-interest
possibility that the pricing decision adopted by each of the allegedly conspiring firms would be irrational but for an understanding that all other firms were committed to following suit.
attributes of cartels
a concentrated market, fungible or homogenous goods, policing and punishment mechanisms, pricing transparency, demand elasticity
fewer firms in the market, easier it is to form, coordinate, and enforce a price-fixing conspiracy
fungible or homogenous goods
hard for firms to fix prices unless their goods are very similar. if goods are heterogenous or differentiated, firms will have to negotiate intensively over which prices apply to which products and cheating on the agreement will be easier.
policing and punishment mechanisms
firms in a cartel face tremendous incentives to cheat. members have to impose mechanisms to detect and punish cheaters for a cartel to be stable.
in a transparent market, buyers have easy access to info about other buyers' and sellers' prices. It's easier for members of cartel to detect cheating + stabilize market.
where demand is elastic w/n the market, the firms have relatively little power to impose price increases through collusion + vice versa
agreements among buyers to manipulate input prices
maximum price setting (Maricopa County Medical Ass'n)
agreements to cap prices charged to buyers. policy: might serve as a benchmark.
agreement on pricing components (Catalano, Inc. v. Target Sales)
agreements to fix one pricing component are still per se illegal restraints
Market division (Palmer v. BRG of GA)
practice of dividing geographic territories, dividing customers, or dividing products.
customer market division
parties agree that one of them will sell exclusively to corporate buyers while the other sells to governmental agencies
product market division
competitors agree which firm will sell which type of product
judged by more stringent standards applicable to horizontal agreements
what happens if an agreement has both vertical and horizontal elements?
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