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Posted Pricing as a Plus Factor

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  • Joseph E. Harrington, Jr.
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    Abstract

    This paper identifies conditions under which an industry-wide practice of posted (or list) pricing is a plus factor sufficient to conclude that firms violated Section 1 of the Sherman Act. For certain classes of markets, it is shown that, under competition, all firms setting a list price with a policy of no discounting is contrary to equilibrium. Thus, if all firms choose posted pricing, it is to facilitate collusion by making it easier for them to coordinate their prices. It is then argued that the adoption of posted pricing communicates the necessary intent and reliance to conclude concerted action.

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    Bibliographic Info

    Paper provided by The Johns Hopkins University,Department of Economics in its series Economics Working Paper Archive with number 565.

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    Date of creation: Aug 2010
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    Handle: RePEc:jhu:papers:565

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