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Posted Pricing as a Plus Factor

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  • Joseph E. Harrington, Jr.

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.

Suggested Citation

  • Joseph E. Harrington, Jr., 2010. "Posted Pricing as a Plus Factor," Economics Working Paper Archive 565, The Johns Hopkins University,Department of Economics.
    • Handle: RePEc:jhu:papers:565
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    File URL: http://www.econ2.jhu.edu/REPEC/papers/wp565.pdf
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