Industry Conferences and Product Price Coordination

We will test the hypothesis that firms’ attendance of industry conferences is associatedwith their product price coordination. Specifically, we will examine whether afterplausibly exogenous cost increase due to positive commodity price shocks, firms inindustries with industry conferences raise their product prices more than those inindustries without such conferences. After commodity price shocks, firms should haveincentives to pass cost increases onto their customers. Industry conferences provide anopportunity for price coordination by bringing together firms in the same industry for aseries of presentations. Managers who attend an industry conference can better assesspeers’ anticompetitive intent and coordinate product prices increase with those firms,because their co-location with peers allows them to evaluate peers’ credibility throughnon-verbal cues and perhaps to have conversations with peers during the break-outsessions. However, if managers attend conferences simply as a part of an investorrelations program, our hypothesis will not be supported by the data.To test the hypothesis, we will compile a novel database linking a firm’s attendance atan industry conference with its monthly product prices over 2006–2019. We will use a“stacked” difference-in-differences approach where the treated (control) firms are thosein industries that have (do not have) a pre-scheduled industry conference after acommodity price shock. We will compare within-firm changes in product prices betweentreated firms and control firms before and after the industry conference. We expectproduct prices to rise more for treated firms than for control firms.We expect the project to add a novel perspective to the literature on firms’ conferenceattendance, which has largely focused on how these conferences affect the relationbetween firms and investors. We will focus on information flow among conferenceattendees and whether it affects activity in the product market. Relatedly, we will add tothe literature on interfirm information exchange related to the intention to collude.Although the literature has shown that trade associations and public disclosures havefacilitated collusion, the role of industry conferences in this behavior remains unclear.We expect to fill this gap by showing industry conferences as a hitherto unexploredmechanism of collusion and by providing evidence on product market consequences for awide range of industries using novel retail price data. Finally, we expect the project toprovide evidence relevant for policymakers and others interested in antitrust regulationsand enforcement.