# Kentucky Case

Topics: Arithmetic mean, Mean, Milk Pages: 2 (458 words) Published: February 13, 2013
Average winning bid price
According to collusion theorists, the mean winning bid price in the “rigged” market will exceed the mean winning bid price in the competitive market for each year in which collusion occurs. In addition, the difference between the competitive average and the “rigged” average tends to grow over time when collusionary tactics are employed over several consecutive years.

Comparison of difference in mean winning bid price between
Tri-county and surrounding area per year per product
YEAR| Difference in mean winning bid price between tri-county and surrounding area| | WWBID| LFWBID | LFCBID|
1983| -0.013072947| -0.012349818| -0.020636|
1984| 0.007960101| 0.010272436| 0.009571333|
1985| 0.013604615| 0.01659496| 0.018084524|
1986| 0.01932697| 0.021271096| 0.024492157|
1987| 0.023072222| 0.025114506| 0.025278968|
1988| 0.023611111| 0.02662967| 0.027711111|
1989| 0.001660088| 0.005543162| 0.005922222|
1990| 0.001067692| 0.004136975| 0.007384848|
1991| -0.004003077| -0.000996667| 0.002147273|

Observations:
1. The mean winning bid price in the tri-county area exceeds the mean winning bid price in the surrounding area during the years 1985-88

2. According to the data in the table (above) this difference in mean winning bid price between tri-county and surrounding area increases during the years 1985-88

Test of Hypothesis:
Table showing mean values of surrounding and tri-county areas for 3 milk products during the collusion years:  | Low Fat White| Whole White| Low Fat Chocolate|
Year| Surrounding area| Tri-county area| Surrounding area| Tri-county area| Surrounding area| Tri-county area| 1985| 0.119989655| 0.136584615| 0.127915385| 0.14152| 0.120632143| 0.138716667| 1986| 0.117821212| 0.139092308| 0.12530303| 0.14463| 0.116891177| 0.141383333| 1987| 0.117308571| 0.142423077| 0.126386111| 0.149458333| 0.118363889| 0.143642857|...