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The Kentucky Milk Case Report on a Statistical Analysis of a Potentially Collusive Market Environment Stephanie Chu Marcie Malaj Briar Sangiuliano Table of Contents Introduction ..............................................................................3 Market Shares..........................................................................3 Incumbency Rates...................................................................3 Bid Levels & Dispersion..........................................................4 Price Versus Cost/Distance....................................................4 Bid Sequence...........................................................................4 Comparison of Average Winning Bid Prices.........................5 Conclusion...............................................................................7 Appendix..................................................................................8 Chu, Malaj & Sangiuliano 2 05/08/2009 Kentucky Milk Case 2 The Kentucky Milk Case Report on a Statistical Analysis of a Potentially Collusive Market Environment Between 1983 and 1991, Meyer and Trauth Dairies were the only two bidders in the market for school milk provisions in the Tri-county region of Kentucky, while the 11 other school districts showed a significantly higher number of bidders; this information suggests collusive activity between Meyer and Trauth. After inspection of the bids, data shows that the two dairies were in fact colluding with one another to submit close bids and make the company actions appear competitive. The summary of the results are as follows: 1. Market Shares % of Market Share 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Meyer 1983 Trauth 1983 Meyer 1984 Trauth 1984 Meyer 1985 Trauth 1985 Meyer 1986 Trauth... View Full Document

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