Posted Pricing as a Plus Factor

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Business Economics and Public Policy Papers
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Business
Economics
Public Affairs, Public Policy and Public Administration
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Harrington, Joseph E
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This article identifies conditions under which an industry-wide practice of posted (or list) pricing is a plus factor sufficient to conclude that firms established an agreement to coordinate their prices. 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 competition. 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.

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2011-03-01
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Journal of Competition Law & Economics
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At the time of publication, author Joseph E. Harrington, Jr. was affiliated with John Hopkins University. Currently, he is a faculty member at the Business, Economy and Public Policy Department at the University of Pennsylvania.
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