Collusion/Competition: A New Learning?

Ever since the U.S. Supreme Court opinion in Matsushita, various U.S. district courts have issued a series of rulings that appear to constitute a new learning on the economics of collusive behavior and to elevate the economic evidentiary bar for successful proof of price-fixing and bid-rigging. The rulings use game theory constructs expressed as pure, interdependent behavior that theoretically can result in supracompetitive prices in the absence of any agreement. The most recent explanation of this learning is contained in the 2016 titanium dioxide (TiO2) opinion Valspar v. E. I. DuPont, which raises the bar for proving a Sherman Act Sec. 1 violation. This and earlier rulings appear counterintuitive when their reasoning is tested against the context of Judge Richard Posner's opinion on the value of circumstantial evidence in High Fructose Corn Syrup and In re Text Messaging. This article identifies market structure and behavioral features typically found in cartel arrangements, and tests the efficacy of what is perceived as a new learning on collusion/competition with empirical data from twelve alleged price-fixing conspiracies successfully litigated over the past two decades. [ABSTRACT FROM AUTHOR]