This appeal concerns the fine line between agreement and tacit collusion, or, put another way, conscious parallelism
. Direct purchasers of containerboard ("the Purchasers") charged multiple manufacturers with conspiring to increase prices and reduce output between 2004 and 2010.
First, using "conscious parallelism
" to identify wolf packs may overestimate the actual strength of activist alliances.
(37) While mere conscious parallelism
may be a factor for a court to find a conspiracy violation under Section 1 of the Sherman Act, alone, it may not satisfy a violation.
In the USA, where the laws are much tougher on anti-competitive practices than here, they call it "conscious parallelism
While the amended complaint offers more detailed instances of price increases than the original, plaintiffs would appear to face the hurdle encountered in defendants' early-March motion to dismiss: namely, as defense counsel stated in its filing, "The Supreme Court has expressly held that such conscious parallelism
is to be expected in concentrated commodity industries like those alleged by Plaintiffs and does not amount to a Sherman Act violation."
a theory of conscious parallelism
. Second, even if the Court did
In this section, I present a simple two-firm model that illustrates the conditions under which conscious parallelism
Professor Donald Turner argues that "oligopoly price behavior," (76) or "conscious parallelism
," (77) can be expressed "as individual behavior--rational individual decision in the light of relevant economic facts"--rather than behavior based upon agreement.
The Evolution of the Theory of Conscious Parallelism
Supreme Court introduced the doctrine of "conscious parallelism
," which holds that "where a group uniform action takes place shortly after a meeting of competitors, that action is a conscious parallel of the meeting, and is therefore, evidence of an implied agreement in restraint of trade arising from that meeting" (Pittsburgh Plate Glass Company vs.
Here, game theory's entry into antitrust analysis was cloaked in the doctrinal dress of section 2 of the Sherman Act even though the theory's logic and the Court's analysis actually fit more comfortably, as I show below, into section 1's unfashionable doctrine of interdependent conscious parallelism
. Indeed, looking past this doctrinal cross-dressing opens the timeworn writ of interdependent conscious parallelism
to a powerful new logic--game theory--that promises to outfit the old writ in new dress that might be called strategic parallel conduct.
Second, the use of price as the dependent variable allows the investigator to escape the Demsetz criticism, that the positive concentration - profit relation found in most empirical studies is due to the efficiency (low cost) of larger firms, not to "shared monopoly," tacit collusion, or conscious parallelism