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Exchanging Price Information can be Efficient: per se offences should be legilsated very sparingly

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  • Evans, Lewis
  • Mellsop, James

Abstract

In this paper we draw upon relevant theory of auctions to show that information exchange among firms that leads to an agreed schedule of prices may not be price fixing and may enhance welfare. A case is described in which per se illegal communication among industry players that produced such agreements enhanced welfare. In the circumstances of the case communication substituted for information exchange that would have been provided by a forward market that was too costly to establish. The results are in accord with a growing body of literature that suggests that per se illegality under competition law should be used very sparingly.

Suggested Citation

  • Evans, Lewis & Mellsop, James, 2003. "Exchanging Price Information can be Efficient: per se offences should be legilsated very sparingly," Working Paper Series 18988, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    • Handle: RePEc:vuw:vuwcsr:18988
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/18988
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    References listed on IDEAS

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    1. Bikhchandani, Sushil & Riley, John G., 1991. "Equilibria in open common value auctions," Journal of Economic Theory, Elsevier, vol. 53(1), pages 101-130, February.
    2. Lewis Evans & Arthur Grimes & Bryce Wilkinson, 1996. "Economic Reform in New Zealand 1984-95: The Pursuit of Efficiency," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1856-1902, December.
    3. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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    price exchange; legislation;

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