« Negative Consequence #3: Altered Incentives and Unintended Consequences | Main | Negative Consequence #4: Overexpansion and the Difficulties of Cutting Back »

July 13, 2006


William Sjostrom

I think you have two errors here. One is supposing that naked price fixing is necessarily abusive (think, e.g., of Telser's empty core models). The other is supposing that antitrust inhibits, rather than helps, naked price fixing. Barbara McCutcheon's 1997 JPE piece showed that antitrust can help cartels solve the renegotiation problem, which might explain the results in Sproul's 1993 JPE piece that antitrust does not lower prices, and may well raise them.

Mark E Hoffer

Speaking of "Anti-Trust", and being new to your weblog, I was wondering if you thought that the Federal Reserve would be an appropriate target for prosecution due to violation of the various "Anti-Trust" laws that are currently extant.
Putting aside, of course, any built-in "immunities" they may have from such.

Thank you very much, in advance, for your thoughts.

The comments to this entry are closed.