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The Conventional Wisdom about Cross-Haul

  • Phillip E. Giffin

    (University of Tennessee)

  • E. Bruce Hutchinson

    (University of Tennessee)

  • Joseph W. Kushner

    (Valdosta State College)

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    Current proponents of neoclassical analysis sometimes exclude imperfect competition as a serious explanation of certain pricing behavior. The authors in this paper focus on the 1981 Southern Plywood antitrust litigation demonstrating that behavior from that case is readily explained within a traditional monopoly/basing-point pricing model whereas alternative economic explanations claiming price-taking behavior must rely upon external explanatory factors. The authors suggest a simple algebraic model to facilitate distinguishing whether observed pricing is or is not consistent with a price-taking explanation.

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    Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

    Volume (Year): 15 (1989)
    Issue (Month): 1 (Jan-Mar)
    Pages: 29-34

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    Handle: RePEc:eej:eeconj:v:15:y:1989:i:1:p:29-34
    Contact details of provider: Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
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    1. Hay, George A & Kelley, Daniel, 1974. "An Empirical Survey of Price Fixing Conspiracies," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 13-38, April.
    2. Haddock, David D, 1982. "Basing-Point Pricing: Competitive vs. Collusive Theories," American Economic Review, American Economic Association, vol. 72(3), pages 289-306, June.
    3. R. H. Coase, 1972. "Industrial Organization: A Proposal for Research," NBER Chapters, in: Economic Research: Retrospect and Prospect, Volume 3, Policy Issues and Research Opportunities in Industrial Organization, pages 59-73 National Bureau of Economic Research, Inc.
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