Premium
Relative Value Scales and Auto Repair Price Fixing
Author(s) -
EMERY DONALD R.,
PATTON WESLEY E.
Publication year - 1978
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1978.tb00886.x
Subject(s) - price fixing , value (mathematics) , economics , commission , relative price , relative value , microeconomics , macroeconomics , mathematics , statistics , finance , collusion
The Federal Trade Commission has voted unanimously to accept judgments that require discontinuance of the preparation, publication, circulation and use of relative value scales due to their potential in price fixing. Thus far these judgments have been limited to the health care industry, but this approach to price fixing has significance for many areas of business, especially the auto repair industry. This study explores the extent to which relative value scales (flat rate manuals) are used in estimating prices for auto repairs, and investigates whether or not price fixing exists for quoted prices, repair times, labor rates, or the ratio between the quoted price for one repair procedure and another.