Q. Do you see where you wrote, “Economists demonstrate the tendency to follow a rivals’ price reduction but not a rivals price increase by means of the bent (or kinked) demand curve”? A. Yes. If one seller lowers a price a rival risks losing sales to it, so price drops are followed down. A. On the other hand, if a rival raises prices, that benefits the one who doesn’t follow; because its lower prices drives buyers away from the higher priced guy into her lower priced shop. … A. And in the case of a simple price fixing cartel, they behave collectively on price. They are fixing the price instead of having market cost forces generate the price.” MR. BONAS: Your Honor, I would like to expand on my co-counsel’s observation about textbook economic instruction a little bit. It is the reciprocal . . . exchange of current price information that is at the heart of this issue. . . . I … encourage the court to take a brief look at Container Corp. …, ... the principles applied to the facts of this case are literally...on all fours with the facts of those two cases. This is a standard price protocol or antitrust instruction. … “Confronting an inflation or market manipulation rule that attaches conclusive significance to an express “agreement” between independent center of initiative, business has every incentive to engage in all of the preliminary steps, but to stop just short of actual agreement. The most important step is the process of collecting, gathering, communicating or exchanging price list information. … Price Checking A. A successful combination requires a method of monitoring for and punishing cheaters. F. Scherer, Industrial Market Structure and Economic Performance, pages 173-179 (1970), cited in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). See F. Scherer, Industrial Market Structure and Economic Performance, pages 176-177 (1970), cited in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). Lew Solomon, live trial testimony, at page 1760:26-1762:10. Government economic expert, PHD. Kenneth Elzinga TT, 3931:1-3932:6. 08-23-99, Trial Transcript, at page 4429:27 - 4431:12. Posner, Antitrust Law: An Economic Perspective, Ch. 7, page 135. Doctor Contractor Ken Elzinga trial testimony at page 3927:1-19. youtube/watch?v=Wti4SA0YZ90
Posted on: Thu, 19 Jun 2014 20:08:54 +0000