South-Westerns' Economic News Summaries
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EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary.
OLIGOPOLY 
Title  Brief Summary 
DutchFlowerAuctions.Com Not Far Away
Full Summary 
It used to be that flowers were grown near markets. Transport costs were high, and with such a fragile commodity as roses, the nearer to the market the grower was, the more profitable the operation. Now, logistical advances are changing all of that.
(Updated June, 2007)
Will Eliminating Patents on Drugs Help Poor Countries?
Full Summary 
Middle-income countries have become more vociferous in their objections to the cost of prescription drugs. Some, like Thailand, have taken steps to no longer recognize the international patents protecting those drugs, and have begun to import cheaper generics. The government’s argument is that the poor of the nation will benefit from cheaper drugs. Is that the case?
(Updated June, 2007)
Just How Easy is it to Collude?
Full Summary 
Sony and Bertelsman, two of the largest record companies in the world, merged together in 2004, creating Sony BMG. That merger reduced the number of major players in the market from five to four - owning about 80% of the market. Is that enough to induce collusive behavior, if only tacitly?
(Updated May, 2007)
Society Would Be Better Off if Everyone Played Cooperatively and Got a Flu Shot
Full Summary 
Adam Smith argued in the Wealth of Nations that individuals, acting in their own best interests, would meet the needs of society. So why doesn't that apply to people getting vaccinated?
(Updated April, 2007)
The Diamond Industry is Now More Than the De Beers Industry
Full Summary 
The global diamond market is no longer controlled by De Beers exclusively. The company that once controlled 45% of rough diamond production but 80% of total sales, now only controls about 40% of rough diamond production and about 45% of total sales. What explains the change?
(Updated March, 2007)
Airlines Fixing Fares? Naahhhhh....
Full Summary 
The U.K.'s Office of Fair Trading and the U.S. Justice Departments are jointly investigating British Airways, Virgin Atlantic, United Airlines and American Airlines for colluding in passenger fares and fuel surcharges. The investigation comes as British Airways stands accused of operating a cartel for cargo fares.
(Updated July 2006)
Not Every Team May Win, But The National Football League Sure Knows How To Operate A Cartel Successfully
Full Summary 
The National Football League (NFL) has shown that it can operate a cartel successfully--so much so that other professional sports leagues like the NBA, NHL, and MLB can only sit on the sidelines and hope someday to be able to adopt the NFL's practices.
(Updated May 2006)
Cheaters sometimes win, and winners sometimes cheat
Full Summary 
Can honest people survive in a competitive world? In some cases they can't; in others, they most definitely can. It all depends upon other people's behavior.
(Updated November 2005)
The Nine-Blade Razor Can’t Be Far Behind…
Full Summary
Gillette is convinced that men continually seek a better, closer shave. In the first quarter of 2006, it will launch the Fusion, the first five-blade razor, in both manual and battery-powered versions.
(Updated October 2005)
Funeral directors conspire to fix casket prices.
Full Summary 
Consumer watchdog groups have filed suit against some of the biggest funeral home chains and the top U.S. casket maker, arguing that the organizations have conspired to inflate the casket costs.
(Updated June, 2005)
All the news that's fit to print--as long as it's from more than one publisher...
Full Summary 
The U.S. Justice Department is investigating proposed plans by some major newspaper publishers to buy additional newspapers.
(Updated April, 2005)
Woops! Wal-Mart looks for a do-over.
Full Summary 
Wal-Mart tried a different approach this past post-Thanksgiving shopping season: not offering the steep discounts it's offered in the past. The retail giant regrets that strategy now.
(Updated February, 2005)
Brother, can you spare a cheap fare anywhere in the US?
Full Summary 
Southwest Airlines can fly anywhere it wants, as long as it's not more than one state away from its home airbase. Or so says the Wright Amendment.
(Updated February, 2005)
Have small plane, will travel.
Full Summary
Airlines around the world have notices the advantages of smaller, more efficient jets to prop up slumping revenues and increasing costs. Enter the Embraer 170.
(Updated November, 2004)
OPEC tries to prove that it's still the Alpha-leader.
Full Summary
OPEC has agreed to increase its targeted oil production rate by 1 million barrels a day, and wants other nations outside the cartel to do the same. However, since OPEC already produces more than the "new target" of 27 million barrels, few consider the agreement to be anything more than a symbolic gesture.
(Updated November, 2004)
Here's an Idea: Let's Just All Raise Our Prices Together...NOT!
Full Summary
A U. S. Justice Department amnesty program is succeeding in encouraging violators who report themselves--and others--during an investigation of price fixing among numerous chemical companies.
(Updated September, 2004)
New NBC Universal Poised for Big Gains in Entertainment Profits
Full Summary
NBC is in the process of finalizing its purchase of Universal Studios, and the new company, NBC Universal, will be one of the five largest entertainment companies in the world.
(Updated July, 2004)
Movie Studios Don't Want to Advertise, But They Just Can't Help Themselves
Full Summary 
Ever since Twisters opened on the first weekend of May,1996, movie studios have been pushing each other for advertising space and consumers' dollars during the summer movie onslaught. This summer promises to be no different: Two dozen new movies will be vying for consumers' attention and dollars at the theaters. Here's the problem: Studios would rather not have this headache.
(Updated June,, 2004)
Price Fixing Among Computer Chip Makers is Not a Good Thing, According to Federal Trade Commission
Full Summary 
The Federal Trade Commission (FTC) is looking into possible charges that computer chip makers, including Samsung Electronics, Hynix Semiconductor, Micron Technology, and Infineon Technologies, have conspired to raise prices of memory chips.
(Updated April, 2004)
For that Really, Really, Really, Really, Really Close Shave
Full Summary 
Schick will roll out a new four-blade razor for men, the Quattro. The company assumes that many men will be willing to pay $9 for a new razor that touts an even closer shave than with only three blades.
(Updated November, 2003)
The Diaper Price War
Full Summary 
As Kimberly-Clark, the maker of Huggies diapers, and Proctor & Gamble, the maker of Pampers, increased their competition last year, Kimberly-Clark tried to raise its price by reducing the number of diapers in its packages. Rather than following with its own price increase, as it had done in the past, P&G responded with its own price cut. The result: P& G gained significant market share at the expense of Kimberly-Clark.
(Updated September 10, 2003)
Steel Supply Strategies
Full Summary 
Overcapacity in the world steel industry is resulting in low steel prices, increased imports, and widespread bankruptcy. The U.S. wants a reduction in global and domestic capacity and temporary tariffs on imports.
(Updated May 1, 2002)
Fair Oil Prices
Full Summary 
The Venezuelan President is trying to increase cooperation between OPEC and non-OPEC oil producers. The plan is to revive oil prices by reducing oil production by each country.
(Updated December 1, 2001)
Commissions Cut
Full Summary 
The commission that travel agents receive from selling airline tickets is being reduced again. Travel agents are angry and would like to be exempted from antitrust prosecution so they can bargain over commissions.
(Updated October 1, 2001)
Airline Cartel Criticized: Being United is Un-American
Full Summary 
  United and American dominate the U.S. airline market. They compete, matching each other's innovations. However, some argue that they collaborate, forming a cartel.
(Updated August 1, 2001)
Flying the Unfriendly Skies
Full Summary 
TWA has agreed to be taken over by American Airlines. Although American denies it, experts expect that fares will increase and service be reduced, especially on routes dominated by TWA and American.
(Updated February 1, 2001)
McDonald's Hope That They See Shareholders Smile
Full Summary
McDonald's has unveiled its new slogan, "We Love To See You Smile," and the associated advertising campaign. This follows a corporate restructuring, new menu items, and more efficient kitchens and ordering systems. McDonald's success will depend critically on the quality of customer service.
(Updated August 1, 2000)
Coffee Cartel
Full Summary 
The world price of coffee is at a seven-year low. This is stimulating talk by the Association of Coffee Producing Countries of withholding coffee from the market to raise prices. However, history indicates that this is unlikely to be successful.
(Updated June 1, 2000)
Cola Prices Pop Up
Full Summary 
PepsiCo is following Coca-Cola in doubling the rate of increase in the price it charges bottlers for concentrate, while raising marketing support payments. The strategy is to increase profitability, but avoid losing volume.
(Updated January 1, 2000)
Sony and Konka Play TV Games
Full Summary 
Konka, a Chinese television manufacturer, is entering the U.S. market. It hopes to make inroads into the high-definition segment with its relatively low prices, but faces stiff competition from established producers such as Sony, which has a higher-quality product. Existing producers are expected to introduce lower-priced HDTVs soon.
(Updated May 1, 1999)
Unhealthy Vitamin Prices
Full Summary 
The Justice Department has successfully prosecuted cartels, which were fixing prices and dividing sales in the markets for two vitamins. The conspiracies are estimated to have cost consumers hundreds of millions of dollars.
(Updated April 1, 1999)
Troubled Waters in Oil Industry
Full Summary 
Exxon and Mobil are considering merging in ourder to reduce costs and to take advantage of each other's strengths. Hastening the union is the low price of oil.
(Updated January 1, 1999)
Of Lizards and Beer
Full Summary 
Anheuser-Busch is going to raise its prices in October 1998, encouraged by the high summer demand for beer and the successful talking-lizard ads. It hopes to avoid the loss of market share and profit that it experienced in 1996, when its price increases were undercut by Miller.
(Updated October 15, 1998)
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