Posted Pricing as a Plus Factor

This paper identifies conditions under which an industry-wide practice of posted (or list) pricing is a plus factor sufficient to conclude that firms violated Section 1 of the Sherman Act. 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 equilibrium. 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.

Corporate Leniency with Private Information: The Push of Prosecution and the Pull of Pre-emption

A corporate leniency program provides relief from government penalties to the first member of a cartel to come forward and cooperate with the authorities. This study explores the incentives to apply for leniency when each cartel member has private information as to the likelihood that the competition authority will be able to convict them without a cooperating firm. A firm may apply for leniency because it fears being convicted ("prosecution effect") or because it fears another firm will apply ("pre-emption effect"). Policies by the competition authority to magnify concerns about pre-emption - and thereby induce greater use of the leniency program - are also explored.

A Theory of Tacit Collusion

A theory of tacit collusion is developed based on coordination through price leadership and less than full mutual understanding of strategies. It is common knowledge that price increases are to be at least matched but who should lead and at what price is not common knowledge. The steady-state price is characterized and it falls short of the best collusive equilibrium price. Coordination through tacit means, rather than express communication, is then shown to constrain the extent of the price rise from collusion.

3.8-Micron Photometry During the Secondary Eclipse of the Extrasolar Planet HD 209458b

We report infrared photometry of the extrasolar planet HD 209458b during the time of secondary eclipse (planet passing behind the star). Observations were acquired during two secondary eclipses at the NASA Infrared Telescope Facility (IRTF) in September 2003. We used a circular variable filter (1.5-percent bandpass) centered at 3.8 microns to isolate the predicted flux peak of the planet at this wavelength. Residual telluric absorption and instrument variations were removed by offsetting the telescope to nearby bright comparison stars at a high temporal cadence. Our results give a secondary eclipse depth of 0.0013 +/- 0.0011, not yet sufficient precision to detect the eclipse, whose expected depth is approximately 0.002 - 0.003. We here elucidate the current observational limitations to this technique, and discuss the approach needed to achieve detections of hot Jupiter secondary eclipses at 3.8 microns from the ground.Comment: 5 pages, 5 figures, in press for MNRA

Private Monitoring and Communication in Cartels: Explaining Recent Collusive Practices

Motivated by recent cartel practices, a stable collusive agreement is characterized when firms' prices and quantities are private information. Conditions are derived whereby an equilibrium exists in which firms truthfully report their sales and then make transfers within the cartel based on these reports. The properties of this equilibrium fit well with the cartel agreements in a number of markets including citric acid, lysine, and vitamins. (JEL D43, D82, K21, L12, L61, L65)

A Method To Remove Fringes From Images Using Wavelets

We have developed a new method that uses wavelet analysis to remove interference fringe patterns from images. This method is particularly useful for flat fields in the common case where fringes vary between the calibration and object data. We analyze the efficacy of this method by creating fake flats with fictitious fringes and removing the fringes. We find that the method removes 90% of the fringe pattern if its amplitude is equal to the random noise level and 60% if the fringe amplitude is $\approx 1/10$ of the noise level. We also present examples using real flat field frames. A routine written in the Interactive Data Language (IDL) that implements this algorithm is available from the authors and as an attachment to this paper.Comment: 7 pages, 14 figures. Accepted to the Astrophysical Journal. (The quality of the figures in this preprint has been downgraded in order to fulfill arXiv requirements. Check journal for the high-quality figures

TEA: A Code for Calculating Thermochemical Equilibrium Abundances

We present an open-source Thermochemical Equilibrium Abundances (TEA) code that calculates the abundances of gaseous molecular species. The code is based on the methodology of White et al. (1958) and Eriksson (1971). It applies Gibbs free-energy minimization using an iterative, Lagrangian optimization scheme. Given elemental abundances, TEA calculates molecular abundances for a particular temperature and pressure or a list of temperature-pressure pairs. We tested the code against the method of Burrows & Sharp (1999), the free thermochemical equilibrium code CEA (Chemical Equilibrium with Applications), and the example given by White et al. (1958). Using their thermodynamic data, TEA reproduces their final abundances, but with higher precision. We also applied the TEA abundance calculations to models of several hot-Jupiter exoplanets, producing expected results. TEA is written in Python in a modular format. There is a start guide, a user manual, and a code document in addition to this theory paper. TEA is available under a reproducible-research, open-source license via https://github.com/dzesmin/TEA.Comment: 14 pages, 8 figures, article is submitted to ApJS, posted on arXiv for public commentary, please send comments to the lead autho

Signaling and Tacit Collusion in an Infinitely Repeated Prisoners' Dilemma

In the context of an infinitely repeated Prisoners.Dilemma, we explore how cooperation is initiated when players signal and coordinate through their actions. There are two types of players - patient and impatient - and a player's type is private information. An impatient type is incapable of cooperative play, while if both players are patient types - and this is common knowledge - then they can cooperate with a grim trigger strategy. We find that the longer that players have gone without cooperating, the lower is the probability that they'll cooperate in the next period. While the probability of cooperation emerging is always positive, there is a positive probability that cooperation never occurs.