The Three Types of Collusion: Fixing Prices, Rivals, and Rules

Collusion can profitably be classified into three distinct types. In our classification, Type I collusion is the familiar direct agreement among colluding firms (a cartel) to raise prices or, equivalently, restrict output. Alternatively, firms can collude to disadvantage rivals in ways that causes those rivals to cut output. We term this Type II collusion. Its indirect effect is an increase in market prices. A number of important collusion cases neither direct manipulation of prices or output, nor direct attacks on rivals. Examples include Supreme Court cases such as National Society of Professional Engineers v. US, Bates v. State Bar of Arizona, and FTC v. Indiana Federation of Dentists. In each of these cases, cartel members set prices and output independently. Their collusion shaped the rules under which the independent decisions of the colluding firms were made. Collusion permitted the cartel members to insulate themselves from each another, at least partially. Their newfound isolation provided benefits similar to those attainable from market power acquired in a more traditional fashion. By increasing the insulation of cartel members, each achieved the power and independence to raise its own price-the colluding firms competed on price, but their competition was rendered less vigorous than by collusion over rules. Archetypal examples of this type of collusion include softening competition by limiting information available to consumers through direct restrictions on advertising. In this Article we explore a number of examples of previously unexplained or uncategorizable cartels that can be explained by this construct. We show that, together, they form a third general category of anticompetitive behavior that we term Type III collusion. With considerable enforcement activity directed at collusion of Types I and II, we believe that Type III collusion will prove increasing attractive to firms and, accordingly, a growing source of social welfare loss from collusion

Collusion over Rules

Many instances of anticompetitive collusion are designed not to affect prices and output directly, but rather to shape the rules under which competition takes place. They help to cushion competitors from hard competition through such rules as restraints on advertising, sham ethical codes, or bans on discounts, coupons, free services, or extended hours of operation. Instead of collusion directly over outcomes, firms attuned to the strategic impact of their activities often agree on ways in which to shape their environments in order to soften competition and to insulate themselves from hard competition in ways that will lead to higher prices. While not every agreement among rivals is anticompetitive, every agreement that is anticompetitive falls within one of three categories. Type I collusion encompasses traditional agreements to affect price and/or output directly or fairly directly. Type II collusion consists of agreements to disadvantage rivals. And Type III rule fixing collusion gathers together and explains the remaining types of agreements

The Three Types of Collusion: Fixing Prices, Rivals, and Rules

Collusion can profitably be classified into three distinct types. In our classification, Type I collusion is the familiar direct agreement among colluding firms (a cartel) to raise prices or, equivalently, restrict output. Alternatively, firms can collude to disadvantage rivals in ways that causes those rivals to cut output. We term this Type II collusion. Its indirect effect is an increase in market prices. A number of important collusion cases neither direct manipulation of prices or output, nor direct attacks on rivals. Examples include Supreme Court cases such as National Society of Professional Engineers v. US, Bates v. State Bar of Arizona, and FTC v. Indiana Federation of Dentists. In each of these cases, cartel members set prices and output independently. Their collusion shaped the rules under which the independent decisions of the colluding firms were made. Collusion permitted the cartel members to insulate themselves from each another, at least partially. Their newfound isolation provided benefits similar to those attainable from market power acquired in a more traditional fashion. By increasing the insulation of cartel members, each achieved the power and independence to raise its own price-the colluding firms competed on price, but their competition was rendered less vigorous than by collusion over rules. Archetypal examples of this type of collusion include softening competition by limiting information available to consumers through direct restrictions on advertising. In this Article we explore a number of examples of previously unexplained or uncategorizable cartels that can be explained by this construct. We show that, together, they form a third general category of anticompetitive behavior that we term Type III collusion. With considerable enforcement activity directed at collusion of Types I and II, we believe that Type III collusion will prove increasing attractive to firms and, accordingly, a growing source of social welfare loss from collusion

Seasonal Movements, Migratory Behavior, and Site Fidelity of West Indian Manatees along the Atlantic Coast of the United States as Determined by Radio-telemetry

The study area encompassed the eastern coasts of Florida, Georgia, and South Carolina, including inland waterways such as the St. Johns River (Fig. 1). Manatees inhabited the relatively narrow band of water that lies between the barrier beaches and the mainland, occasionally venturing into the ocean close to shore. Between Miami and Fernandina Beach, Florida, 19 inlets provided manatees with corridors between the intracoastal waters and the Atlantic Ocean; the distance between adjacent inlets averaged 32 km(SD = 24 km) and varied from 3 to 88 km. Habitats used by manatees along this 900-km stretch ofcoastline varied widely and included estuaries, lagoons, rivers and creeks, shallow bays and sounds, and ocean inlets. Salinities in most areas were brackish, but ranged from completely fresh to completely marine. The predominant communities of aquatic vegetation also varied geographically and with salinity: seagrass meadows and mangrove swamps in brackish and marine waters along the southern half of peninsular Florida; salt marshes in northeastern Florida and Georgia; benthic macroalgae in estuarine and marine habitats; and a variety of submerged, floating, and emergent vegetation in freshwater rivers, canals, and streams throughout the region. Radio-telemetry has been used successfully to track manatees in other regions ofFlorida (Bengtson 1981, Powell and Rathbun 1984, Lefebvre and Frohlich 1986, Rathbun et al. 1990) and Georgia (Zoodsma 1991), but these early studies relied primarily on conventional VHF (very high frequency) transmitters and were limited in their spatial and temporal scope (see O'Shea and Kochman 1990 for overview). Typically, manatees were tagged at a thermal refuge in the winter and then tracked until the tag detached, usually sometime between the spring and fall of the same year. Our study differs from previous research on manatee movements in several important respects. First, we relied heavily on data from satellite-monitored transmitters using the Argos system, which yielded a substantially greater number of locations and more systematic collection of data compared to previous VHF tracking studies (Deutsch et al. 1998). Second, our tagging and tracking efforts encompassed the entire range of manatees along the Atlantic coast, from the Florida Keys to South Carolina, so inferences were not limited to a small geographic area. Third, we often used freshwater to lure manatees to capture sites, which allowed tagging in all months of the year; this provided more information about summer movement patterns than had previous studies which emphasized capture and tracking at winter aggregations. Finally, the study spanned a decade, and success in retagging animals and in replacing transmitters allowed long-term tracking ofmany individuals. This provided the opportunity to investigate variation in seasonal movements, migratory behavior, and site fidelity across years for individual manatees. (254 page document.

Antidepressant medications in dementia: evidence and potential mechanisms of treatment-resistance

Depression in dementia is common, disabling and causes significant distress to patients and carers. Despite widespread use of antidepressants for depression in dementia, there is no evidence of therapeutic efficacy, and their use is potentially harmful in this patient group. Depression in dementia has poor outcomes and effective treatments are urgently needed. Understanding why antidepressants are ineffective in depression in dementia could provide insight into their mechanism of action and aid identification of new therapeutic targets. In this review we discuss why depression in dementia may be a distinct entity, current theories of how antidepressants work and how these mechanisms of action may be affected by disease processes in dementia. We also consider why clinicians continue to prescribe antidepressants in dementia, and novel approaches to understand and identify effective treatments for patients living with depression and dementia

Virtual models in online shopping: do they help or hinder customers?

Virtual experience and other technology-dependent methods of describing products online are frequently touted as the way of the future in e-commerce. However, despite the hyperbole, these claims have actually not been tested rigorously on systems used by major online retailers. This paper reports the results of an experiment that assesses user perceptions of the informativeness and ultimate usefulness of systems that use personalization and rich media to enhance the online product evaluation process. Our results challenge the commonly held view that the “high-tech” approach is, in its own right, beneficial to either the customer or the vendor. Key results are (i) the highest levels of informativeness about anticipated (future) experiences were achieved when no personalization systems were used; and (ii) the system that provided the most personalized support was perceived to be least informative about future experience, and least useful overall. Overall, our results indicate that although these systems can improve awareness of some important product attributes, with this enhanced awareness comes a reduced awareness of other product characteristics. At worst, these systems actually appear to make the customer less informed, and result in negative assessments of the retailer

Three Super-Earths Orbiting HD 7924

We report the discovery of two super-Earth mass planets orbiting the nearby K0.5 dwarf HD 7924 which was previously known to host one small planet. The new companions have masses of 7.9 and 6.4 M$_\oplus$, and orbital periods of 15.3 and 24.5 days. We perform a joint analysis of high-precision radial velocity data from Keck/HIRES and the new Automated Planet Finder Telescope (APF) to robustly detect three total planets in the system. We refine the ephemeris of the previously known planet using five years of new Keck data and high-cadence observations over the last 1.3 years with the APF. With this new ephemeris, we show that a previous transit search for the inner-most planet would have covered 70% of the predicted ingress or egress times. Photometric data collected over the last eight years using the Automated Photometric Telescope shows no evidence for transits of any of the planets, which would be detectable if the planets transit and their compositions are hydrogen-dominated. We detect a long-period signal that we interpret as the stellar magnetic activity cycle since it is strongly correlated with the Ca II H and K activity index. We also detect two additional short-period signals that we attribute to rotationally-modulated starspots and a one month alias. The high-cadence APF data help to distinguish between the true orbital periods and aliases caused by the window function of the Keck data. The planets orbiting HD 7924 are a local example of the compact, multi-planet systems that the Kepler Mission found in great abundance.Comment: Accepted to ApJ on 4/7/201

Effect of decorrelation on 3-D grating detection with static and dynamic random-dot stereograms

Three experiments examined the effects of image decorrelation on the stereoscopic detection of sinusoidal depth gratings in static anddynamic random-dot stereograms (RDS). Detection was found to tolerate greater levels of image decorrelation as: (i) density increasedfrom 23 to 676 dots/deg2; (ii) spatial frequency decreased from 0.88 to 0.22 cpd; (iii) amplitude increased above 0.5 arcmin; and (iv) dotlifetime decreased from 1.6 s (static RDS) to 80 ms (dynamic RDS). In each case, the specific pattern of tolerance to decorrelation couldbe explained by its consequences for image sampling, filtering, and the influence of depth noise

Effect of decorrelation on 3-D grating detection with static and dynamic random-dot stereograms

Three experiments examined the effects of image decorrelation on the stereoscopic detection of sinusoidal depth gratings in static anddynamic random-dot stereograms (RDS). Detection was found to tolerate greater levels of image decorrelation as: (i) density increasedfrom 23 to 676 dots/deg2; (ii) spatial frequency decreased from 0.88 to 0.22 cpd; (iii) amplitude increased above 0.5 arcmin; and (iv) dotlifetime decreased from 1.6 s (static RDS) to 80 ms (dynamic RDS). In each case, the specific pattern of tolerance to decorrelation couldbe explained by its consequences for image sampling, filtering, and the influence of depth noise

Bostonia. Volume 13

Founded in 1900, Bostonia magazine is Boston University's main alumni publication, which covers alumni and student life, as well as university activities, events, and programs