Courts agree that meeting to "fine-tune" a collusive agreement
would constitute a novel overt act that would restart the limitations period; what constitutes fine tuning, however, is not as clear.
This is however not sufficient to guarantee the existence of a collusive equilibrium as firm i may not be able to prevent a deviation by raiding firms from the collusive agreement
. In other words, firm i must be able to share a large enough portion of its profits with the raiders to prevent them from hiring the worker after investment has occurred.
--It needs to be a method of initial and quick verification of a hypotheses of the existence of a collusive agreement
in an industry/a corresponding market which may be applied straightforwardly to the existing data;
Call such a game [G.sup.l] (n, [infinity],8) where the superscript denotes that deviation is detected after l period(s); that is, we assume that an individual deviation from any collusive agreement
is detected by the rest n-1 firms after l period(s), for l = 1,2,..., T.
(71) For example, in the court's analysis of PacifiCare's aggressive negotiating strategy, the court noted that a United executive pointed out that "in year 2, we can move them [PacifiCare] to our contracts," and this statement indicated the opposite of a collusive agreement
between United and PacifiCare.
We show in particular that, in our illustration with two downstream and three upstream firms, a collusive agreement
between one downstream and one upstream firm can have diametrically opposite consequences depending whether the technology is constant, or decreasing returns.
existence of a tacitly collusive agreement
and establishes a violation
Specifically, George Stigler "reasoned that 'oligopolists wish to collude to maximize joint profits' but 'if any member of any agreement can secretly violate it, he will gain larger profits than by conforming to it,' so a model of oligopoly should focus on the 'problem of policing a collusive agreement
Moreover, any collusive agreement
triggered by the use of AD law cannot be exempt of antitrust action and the Noer-Pennington doctrine does not allow for such exemption, but considers any private attempt to affect prices or quantities illegal.
We show that firms can design their capital structure to provide a publicly observable indication of compliance with a collusive agreement
. We develop two empirically testable hypotheses based on this argument and test these propositions on data for seven integrated mill steel firms.
In order for a collusive agreement
to remain viable, the colluders must exert some effort to enforce the agreement, that is, to detect and punish defectors.
But if the profit gains from collusion are substantially high relative to the costs of operating the collusive agreement
(including fines and any other types of punitive liabilities), then the companies have incentives to operate the collusive agreements