Price Parallelism on Mobile Communication Markets: Three Interpretations
EDN: YNJNYD
Abstract
Price parallelism in itself is not a violation of antitrust law. However, in the mobile communication market, it is complemented by features of product characteristics and industry regulation in such a way that, as a result, it often attracts the attention of antitrust authorities as a sign of concerted actions (or agreements) restricting competition. The article shows that the existing norms in the law that describe the criteria for classifying concerted actions are based on economic models that often do not take into account some real features of the market and of the sellers and buyers. As a result, the same observable practices may have alternative interpretations that do not imply any kind of coordination between market participants. The article offers three such alternative interpretations: through the discrepancy between the expected and actual volume of service consumption, from the standpoint of the «new theory of consumer demand» and from the behavioral economics standpoint. To make a decision about the existence of a violation, these hypotheses concerning the causes of parallel behavior must be disproved with a sufficient degree of accuracy, otherwise there is a high risk of law enforcement errors.
References
1. Авдашева С. Б., Голованова С. В., Шаститко А. Е. Конкурентная политика в период кризиса // Вопросы экономики. 2009. № 3. С. 54-69.
2. Авдашева С. Б., Калмычкова Е. Н., Шаститко А. Е. Экономические основы антимонопольной политики: российская практика в контексте мирового опыта (Лекционные и методические материалы) // Экономический журнал Высшей школы экономики. 2007. № 11 (2). С. 234-270.
3. Авдашева С. Б., Шаститко А. Е. Уголовное преследование за нарушение антимонопольного законодательства: возможности и риски // Экономическая политика. 2009. № 5. С. 93-98.
4. Коуз Р. Фирма, рынок и право. М.: Дело. 1993.
5. Шаститко А. Е. Экономико-правовые аспекты коллективного доминирования // Экономическая политика. 2011. № 3. С. 167-191.
6. Cooper P. The Begrudging Index and the subjective Value of Money / in Pricing Strategy, Taylor, B., Wills, 0., eds. London: Staples Press, Ltd, 1969. Р. 122-131.
7. Dodds W. B., Monroe K. B., Orewal D. Effects of Price, Brand, and Store Information on Buyers' Product Evaluations // Journal of Marketing Research. 1991. Vol. 28. No. 3. Р. 307-319.
8. Orewal D., Monroe K. B., Krishnan R. The Effects of Price-Comparison Advertising on Buyers' Perceptions of Acquisition Value, Transaction Value, and Behavioral Intentions // Journal of Marketing. 1998. Vol. 62. No. 2. Р. 46-59.
9. Hendler R. Lancaster's New Approach to Consumer Demand and Its Limitations // The American Economic Review. 1975. Vol. 65. No. 1. Pp. 194-199.
10. Kovacic W. E., Marshall R. C., Marx L. M., White Jr., Halbert L. Plus Factors and Agreement in Antitrust Law // Michigan Law Review. 2011. Vol. 110. No. 3. Р. 393-436.
11. Lancaster K. A New Approach to Consumer Theory // Journal of Political Economy. 1966a. Vol. 74. No. 2. P. 132-57.
12. Lancaster K. Change and Innovation in the Technology of Consumption // American Economic Review. 1966b. Vol. 56. Р. 14-23.
13. Lancaster K. Consumer Demand: A New Approach. New York, 1971.
14. Mellers B. A., Biagini K. Similarity and Choice // Psychological Review. 1994. Vol. 101. No. 3. Р. 505-518.
15. Page W. H. Twombly and communication: the emerging definition of concerted action under the new pleading standards // Journal of Competition Law & Economics. 2009. Vol. 5. No. 3. Р. 439-468.
16. Rao A. R., Monroe K. B. The Effect of Price, Brand Name, and Store Name on Buyers' Subjective Product Assessment: Integrative Review // Journal of Marketing Research. 1989. Vol. 26. No. 3. Р. 351-357.
17. Rao A. R., Monroe K. B. The Moderating-Effect of Prior Knowledge on Cue Utilization in Product Evaluations // Journal of Consumer Research. 1988. Vol. 15. No. 2. Р. 253-264.
18. Rieskamp L., Busemeyer J. R., Mellers B. A. Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice // Journal of Economic Literature. 2006. Vol. 44. No. 3. Р. 631-661.
19. Rieskamp J., Hoffrage U. When Do People Use Simple Heuristics, and How Can We Tell? / In Simple Heuristics That Make Us Smart, ed. 0igerenzer, 0., Todd, P. M., and the ABC Research 0roup. New York: Oxford University Press. 1999. P. 141 - P7.
20. Scitovszky T. Some Consequences of the Habit of Judging Quality by Price // Review of Economic Studies. 1945. Vol. 12. P. 100-105.
21. Simonson I. Choice Based on Reasons: The Case of Attraction and Compromise Effects // Journal of Consumer Research. 1989. Vol. 16. No. 2. P. 158-174.
22. Tversky A., Simonson I. Context Dependent Preferences // Management Science. 1993. Vol. 39. No. 10. P. 1179-1189.
23. Werden O. J. Economic evidence on the existence of collusion: reconciling antitrust law // Antitrust Law Journal. 2004. Vol. 71. No. 3. P. 719-800.
Review
For citations:
Shastitko A., Shastitko A., Pavlova N. Price Parallelism on Mobile Communication Markets: Three Interpretations. Journal of Modern Competition. 2017;11(6):27-39. EDN: YNJNYD
Email this article 