List prices and collusion in industrial markets

Abstract

In several industrial markets secret discounts are the rule. Standard models suggest that if suppliers in these markets want to collude, they must develop an allocation structure to avoid discounts, but many antitrust cases are centered on their list price announcements. We build a testable theory that (i) rationalizes the publication of list prices, (ii) shows collusion through coordinated publication is possible, and (iii) informs the policy debate by pointing to indicators antitrust authorities should be concerned with.