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"If the supply is not in doubt, but the hotels all raise the prices collectively knowing that the investor meeting is being held, it could be interpreted casual
by jhonovich 13y ago
"If the supply is not in doubt, but the hotels all raise the prices collectively knowing that the investor meeting is being held, it could be interpreted casually as price gouging."
No, that would be collusion. They would be running a cartel and that would be illegal.
Worse, your speculation that Buffet is doing this to get hotels 'to break rank' is absurd. Metropolitan Omaha has ~10,000 hotel rooms (source - http://www.visitomaha.com/meetings/faqs/#.U0R2_61dUnI http://www.visitomaha.com/meetings/faqs/#.U0R2_61dUnI) compared to the 30,000 people who plan to visit _just_ for the shareholder's meeting. There is far more demand than there is supply of rooms, this is simply a rational response to that.
- digikata 13y agoI didn't mean to imply collusion as I have no evidence of that. (As an aside, just because it's illegal doesn't mean it's not occuring.) Not sure if my terms are the correct here, but in my mind I was thinking collective != collaborative - in that it's possible to act collectively by exchanging public market information without crossing the line of colluding.
- makomk 13y agoFrom what I recall, it's illegal for companies to get together and agree not to raise prices, but there's no law preventing them from noticing that their competitors are putting their prices up and raising their own in unison and this is actually quite common.
- r00fus 13y agoTerms to be aware of: Tacit Collusion [1], Price Leadership and Price Signaling. [1] http://en.wikipedia.org/wiki/Tacit_collusion http://en.wikipedia.org/wiki/Tacit_collusion