Price Fixing

So…why are we fixing prices anyway? When did they break? Ok, yeah, yeah...old joke among colluders.

And that’s pretty much what price fixing is: collusion. There is no "c" in team.

Like, in a given market, there are three sellers of zombie hosiery. Extra thick stockings to, uh, keep in all the goop. And bones and stuff. One specializes in the fall line; another the spring; another the summer. But instead of competing against each other, such that a setup like a particular lovely ensemble might fetch $100 at Zomb-Mart, they collude on pricing, and all agree to never sell hosiery for less then $200 per. And zombies have to buy it or, well, bad things happen.

The biggest price fixer? OPEC. Price fixing of oil, in their countries, is actually legal. Not in the U.S. So, how do we police it, or manage it, other than just embrace Tesla? Yeah. Hard to do.

Airlines have price fixed in the past. So have computer chip companies. And so have self-cleaning litter box companies. And if you think about the motivation to fix, it’s big. Three owners get together in a bar and quietly opine on the low profit margins they’re getting in their business.

The three of them represent 92 percent of all sales in their industry segment. Call it solar-powered roof tiles. At a dollar a tile, they make a dime in operating profit...but if they all colluded and made them $1.40, nobody would really know the difference. The costs are just passed on to the idiot consumer who simply wants his refrigerator to be powered by the great and powerful Sun God.

But at a buck-40, way higher than where supply meets demand, instead of operating profits of a dime a tile, they make like 50 cents...5 times the number. Is all that additional profit worth the legal risk? Worth the jail time?

Well, for some it is. Especially those who, uh…look good in orange.