List Price Collusion

Firms sometimes collude by agreeing on increases in list prices. Yet, the efficacy of such list price collusion is subject to discussion as colluding firms might, in principle, deviate secretly from the elevated prices by granting their customers discounts. This article reviews cases of list price c...

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Bibliographic Details
Published inJournal of industry, competition and trade Vol. 21; no. 3; pp. 393 - 409
Main Authors Boshoff, Willem H, Paha, Johannes
Format Journal Article
LanguageEnglish
Published New York, NY Springer US 01.09.2021
Springer Nature B.V
Subjects
Anchoring
Antitrust
Cartel
Collusion
Companies
Customers
Discount
Discounts
Economic Policy
Economics
Economics and Finance
Efficacy
European Integration
Industrial Organization
International Economics
Joint ventures
List price
Microeconomics
Prices
R & D/Technology Policy
Reference prices
Collusion
Discount
List price
Reference prices
Cartel
Anchoring
Antitrust
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ISSN1573-7012
1566-1679
1573-7012
DOI10.1007/s10842-021-00360-w

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Summary:Firms sometimes collude by agreeing on increases in list prices. Yet, the efficacy of such list price collusion is subject to discussion as colluding firms might, in principle, deviate secretly from the elevated prices by granting their customers discounts. This article reviews cases of list price collusion in the USA and Europe, and it presents a theory of harm suggesting that a combination of anchoring, orientation on reference points, and loss aversion may render list price collusion effective in raising transaction prices—even if firms set transaction prices in a non-coordinated fashion.
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ISSN:1573-7012
1566-1679
1573-7012
DOI:10.1007/s10842-021-00360-w