Figure 5.

2 Parallel-Pricing
Plus Factor
Plus factors are economic actions and outcomes, above and beyond
parallel conduct by oligopolistic firms, that are largely inconsistent
with unilateral conduct but largely consistent with explicitly
coordinated action. Possible plus factors are typically enumerated
without any attempt to distinguish them in terms of a meaningful
economic categorization or in terms of their probative strength for
inferring collusion.
1. It would be in the partie’s self-interest if they all acted the same way
(rational-motive test).
2. The price increases in times of surplus.
3. There is an artificial standardization of product.
4. Suspicious reasons are given to explain behavior.
5. There is an opportunity to collude-for example, correspondence or
meetings especialy if immediately followed by simultaneous, identical
actions.
6. The price uniformity over a long period of time is not caused by rise
in cost of a common input.
7. The market structure is conducive to collusion-for example, small
number of sellers, high barriers to entry, unsophisticated or last-minute
purchasers.
8. There is a stability of market shares over time.
9. High profit margins are present.
The legality of price signaling practices have also been judged by the
rule of reason criterion. Their evaluation in the courts has relied on a set
of plus factors similar to those used in evaluating parallel pricing (see
Figure 15.3).6 Note the importance of the price information being
communicated in a public way and the negative regard that would be
given to a trade association that, say, published industry price schedules
but then threatened to expel any association member who did not
adhere to these schedules. It has also been recognized that, in a market
that is not highly concentrated in a few companies, public
communication of price information could actually have a pro-
competitive effect, by facilitating free price competition.
Figure 5.3 SIGNALING/PRICE-
INFORMATION PLUS FACTORS
Price signalling is the message that your prices send to your customers about the quality of your products. For most
people, prices are directly proportional to quality. So, if a product is more expensive than another similar product,
people tend to assume that this price increase is due to the more expensive product being better.

Of course, this isn’t always accurate, as there are other factors that can influence the price of a product. This includes
everything from the strength of the brand, and whether the company is doing quality branding or not.
1. There is evidence of anticompetitive intent.
2. The absence of independent business reasons for information exchange is present.
3. Data are not available to the public.
4. Present or future data are exchanged.
5. The data disclose individual transactions or customers.
6. The market is highly concentrated.
7. There is evidence of coercive mechanisms that pressure competitors to adhere to price schedules