1. Lectures in Microeconomics-Charles W. Upton Here a Cartel, there a Cartel

2. The Government as a Creator of Cartels Lemon Growers

3. Here a Cartel, there a Cartel The Government as a Creator of Cartels Lemon Growers Milk production

4. Here a Cartel, there a Cartel The Government as a Creator of Cartels Lemon Growers Milk production Bidding on government contracts

5. Here a Cartel, there a Cartel The Government as a Creator of Cartels Lemon Growers Milk production Bidding on government contracts –Smith and Wilson are contractors, who agree to fix prices –Public bids makes it hard to cheat. –But secret bidding makes it easy to cheat.

6. Here a Cartel, there a Cartel The Football Cartel Not a monopoly but a monopsony

7. Here a Cartel, there a Cartel The Football Cartel Not a monopoly but a monopsony –This is designed to keep player “salaries”down. –The reason is obvious-keep costs down.

8. Here a Cartel, there a Cartel The Football Cartel Not a monopoly but a monopsony Remember the two problems: –Cheating –Entry

9. Here a Cartel, there a Cartel The Football Cartel Cheating

10. Here a Cartel, there a Cartel The Football Cartel Cheating The huge NCAA rulebook on recruiting.

11. Here a Cartel, there a Cartel The Football Cartel Cheating The huge NCAA rulebook on recruiting. –Limits on summer jobs –No alumni support

12. Here a Cartel, there a Cartel The Football Cartel Cheating The huge NCAA rulebook on recruiting. Why no Department of Justice anti-trust enforcement?

13. Here a Cartel, there a Cartel The Football Cartel Cheating The huge NCAA rulebook on recruiting. Why no Department of Justice anti-trust enforcement? –This is academics, not a business

14. Here a Cartel, there a Cartel The Football Cartel Entry

15. Here a Cartel, there a Cartel The Football Cartel Entry It is hard to break into big time football.

16. Here a Cartel, there a Cartel The Football Cartel Entry It is hard to break into big time football. –Cannot compete on salaries –Cannot compete on NFL exposure –Side payments to other schools.

17. Here a Cartel, there a Cartel End ©2005 Charles W. Upton