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Fuqua Faculty Conversations

Leslie Marx

Leslie Marx on The Economics of Collusion

October 24, 2012

Leslie Marx

Join Leslie M. Marx, William and Sue Gross Research Fellow and Professor of Economics, as she presents “The Economics of Collusion.”

We will discuss:

  • How firms such as Coca Cola have paid too much for many of their inputs due to price fixing conspiracies among their input suppliers
  • Current research on the economics of collusion
  • Collusive structures required by cartels in order to deter secret deviations by cartel member
  • What you can do to defend your business against paying high prices due to collusion among your input suppliers

Professor Marx’s session took place in December 2012.

View Professor Marx’s Bio (PDF)



Pre-recorded Video

Live Session Recording

1 Comment

  1. Michael Lorton, L '79

    Dear Professor Marx:
    Thank you for a very informative talk on the economics of collusion in general and on plus factors in particular. I will find and read your University of Michigan paper. The U.S. is only now implementing a regulatory regime for follow-on biologics. Compared to the generic small molecule drug market, follow-on biologics in general and follow-on monoclonal antibodies in particular seem to have a much smaller market penetration and much smaller erosion of the respective reference biologics prices. Some of that may be due to the unique science of biologics vis-a-vis small molecule drugs. We are concerned about claims of “conscious parallelism” or Nash equilibrium serving as a pretext for a collusion worked out by a very few, very clever follow-on biologics makers. Given the barriers to entry into the follow-on biologics business and the inordinately capital intensive nature of that industry, the Federal Trade Commission has projected that only a few, large established biologics makers will be able to enter the follow-on biologics market. Given the nation’s demographics, financial crisis, and skyrocketing biologics costs; we fear that clever oligopolists and a highly inelastic demand for biologics does not bode well. Thanks again for your presentation. Michael D. Lorton, M.D.

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