1. Testing for Imperfect Competition NY’s Fulton Fish Market

2. Take an obviously Competitive Market Study the players: Customers Dealers Fishermen

3. Fulton Fish Market Look for collusion on the part of buyers or sellers Note buyers: race, price, cash or credit Dealers uniformly white Players are uniformly Male

4. Fulton Fish Market Fishermen bring in their catches of whitfish by 5 AM Monday thru Friday Dealers are selling 60lb boxes of fish Sell to buyers for 1 chain store, and many small stores and Fry shops in the area Market hours are 5 to 7 AM

5. Competitive ? Buyers who are equally costly to service pay different prices. 3rd Degree price discrimination

6. Mafia ? The docks are controlled by the Mafia All loading and unloading Ease of entry…

7. Dealers 6 Whitfish dealers Graddy was permitted at one

8. Price Discrimination Enabling Environment - No arbitrage – little social contact - Buyers unaware of others prices

9. Demand Loglinear of price Log P = a + a log Q + e

10. Marginal Cost Weather is the primary determinant of the fishes value; harsher the higher MC = MC(q, W) Prices vary from 70 cents/lb to 1.75/lb

11. Conclusions 1. Karen is only woman in market 2. One dealer was observed 3. Dealers don’t fish; fishermen don’t deal 4. Dealers have own marginal costs 5. Market is more an auction of derivatives 6. Asian buyers buy 69% 7. White buyers buy 27%

12. New Study? I suggest a new study in either Los Angeles’ Grand Market Or LA’s Fashion district alley One with many buyers and sellers

13. Milton Friedman 1912 – 2006