Posted by Social Science Research Network
Signaling and Agreement in Antitrust Law William H. Page (University of Florida)
Abstract: Oligopolists look for signals from one another in planning their strategies. Some signals solicit cooperation from rivals and a still smaller number succeed in achieving noncompetitive equilibria. But only a subset of these noncompetitive outcomes involve agreements under Section 1 of the Sherman Act. In this essay, I try to identify what sorts of signaling fall within this last and narrowest category: signaling that brings about agreement. Conventional signals are actions, like nods of the head, that a culture has recognized as having a specific meaning; prearranged signals are outwardly benign actions or events that parties have agreed to treat as having special significance for them. Both conventional and prearranged signals may form or implement an express agreement under Section 1 in the same way as words, although rivals sometimes prefer to use the signals rather than words in order to conceal a surreptitious conspiracy. Still more important for antitrust law in practice are implicit signals — actions with general, often benign meanings for more than one audience, but that rivals understand as conveying a special meaning for them. Where the action’s multiple meanings for multiple audiences have important efficiency consequences — like a bare public announcement about present or even future prices — courts do not treat the specialized meaning for rivals as triggering a Sherman Act agreement, even if the conduct facilitates noncompetitive pricing. On the other hand, even a formally public announcement may bring about an agreement, if its implicit meaning targets rivals without providing useful information to other audiences.
Featured News
EU Extends Support for Farms and Fisheries Amid Market Disruptions
May 5, 2024 by
CPI
Sony and Apollo Bid $26 Billion for Paramount Acquisition
May 5, 2024 by
CPI
Goldman Sachs Resolves Decade-Old Metal-Rigging Class Action Lawsuit
May 5, 2024 by
CPI
Italian Antitrust Ruling Puts Halt on Intesa Sanpaolo’s Fintech Ambitions
May 5, 2024 by
CPI
Google Antitrust Case: Closing Arguments Conclude
May 5, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI