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How to avoid regulatory antitrust scrutiny: The behavioral defense Case Solution & Answer

This Case is about MARKETING

PUBLICATION DATE: July 15, 2015 PRODUCT #: BH686-HCB-ENG

Firms, especially those with profit margins, are often scrutinized by regulatory authorities that suspect them of anticompetitive practices such as cartel formation. In this particular article, I introduce a behavioral strategy of competing that indicates companies with the greatest of gross profits are actuallycompeting vigorously against each other, instead of as the regulatory authorities might indicate colluding. Companies utilizing the behavioral strategy can indicate to antitrust authorities that their purpose is notto restrict competition. Four mechanisms demonstrate this competitive inclination: (1) competitive intensity, (2) competitive sophistication, (3) strike imitation, and (4) competitive activity speed.

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