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The great school milk conspiracies of the 1980s

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Abstract

Various dairy companies' allocation of school milk contracts using signalling, sham bids to honor incumbency and other devices are examined to determine whether bidding was collusive or pure oligopolistic interdependent behavior following noncooperative game theory. The schemes used to allocate contracts were found to be efficient methods for reaching agreements. Since pure interdependent (noncoorperative) behavior requires rivals to corelate signals, coordinate expectations, and resolve timing-uncertainty problems within sealed-bidding constraints, detailed analysis of the economic evidence of bidding practices requires rejection of a Nash equilibrium explanation for the behavior.

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  1. Department of Economics, University of Florida, Post Office Box 117154, 32611-7154, Gainesville, Florida, U.S.A.

    Robert F. Lanzillotti

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  1. Robert F. Lanzillotti
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Lanzillotti, R.F. The great school milk conspiracies of the 1980s. Rev Ind Organ 11, 413–458 (1996). https://doi.org/10.1007/BF00157772

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