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He colluded with other sellers to 'fix' prices. In a fair market, individual sellers set their own prices. This works to limit the ability of one seller to pric

by elmin 12y ago

He colluded with other sellers to 'fix' prices. In a fair market, individual sellers set their own prices. This works to limit the ability of one seller to price gouge. If they charge too much, a competitor will undercut them, gradually lowering the price to a fair deal for both buyers and sellers (in theory). If the sellers all collude however, they can set whatever price they want. This can force buyers to pay more than is 'fair'. In the US, following some major issues with the railroads, antitrust laws were inacted. These laws make getting together with your competitors to set prices illegal in some cases. Some people think this is just a part of doing business. Others believe it's a necessary protection for consumers to maintain a fair market economy.

sireat 12y ago
Collusion on price is the same behaviour that is seen across produce markets(also swap meets et al) across the world. TV teams usually do their yearly investigations but nothing happens. Let's not talk about price collusion in hard drives, pencils etc etc. https://news.google.com/newspapers?nid=1755&dat=19540206&id=kyAhAAAAIBAJ&sjid=0mQEAAAAIBAJ&pg=2996,789994&hl=en https://news.google.com/newspapers?nid=1755&dat=19540206&id=... In fact it is quite natural for sellers to try to price-fix if you think about it. The regular sellers at the produce market do not want to piss off each other and realize that selling at the bare minimum profit (or loss) would hurt them all and slowly collusion is reached. Sure a few outcasts would try to lower the prices but they quickly learn if they want to survive and be there for a longer time. It happens because the cost of goods is very similar to all sellers and competing on price alone is not going to make anyone happy(not even buyers). What always confused me about collusion in marketplaces like Amazon is that it seems that it would be much harder to find everyone to agree on pricing and that rebels and rule breakers would be more prevalent.

by elmin 12y ago

sireat 12y ago

Collusion on price is the same behaviour that is seen across produce markets(also swap meets et al) across the world. TV teams usually do their yearly investigations but nothing happens. Let's not talk about price collusion in hard drives, pencils etc etc. https://news.google.com/newspapers?nid=1755&dat=19540206&id=kyAhAAAAIBAJ&sjid=0mQEAAAAIBAJ&pg=2996,789994&hl=en https://news.google.com/newspapers?nid=1755&dat=19540206&id=... In fact it is quite natural for sellers to try to price-fix if you think about it. The regular sellers at the produce market do not want to piss off each other and realize that selling at the bare minimum profit (or loss) would hurt them all and slowly collusion is reached. Sure a few outcasts would try to lower the prices but they quickly learn if they want to survive and be there for a longer time. It happens because the cost of goods is very similar to all sellers and competing on price alone is not going to make anyone happy(not even buyers). What always confused me about collusion in marketplaces like Amazon is that it seems that it would be much harder to find everyone to agree on pricing and that rebels and rule breakers would be more prevalent.