EconWorks Podcast

25:47

Cartels, Episode 5: If Everyone Can Confess First,...

EconWorks Podcast ·

2026/10/08

Leniency programs are supposed to destabilize cartels by rewarding the first participant who comes forward. But that creates an intriguing game-theory puzzle.If every cartel member knows that someone else could confess first, everyone has an incentive to move sooner. Backward induction seems to lead to an extreme prediction: confess immediately—and, therefore, never form the cartel.Reality is different. Cartels still form.This episode examines why. We distinguish cartel detection from deterrence,

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8:15

Two Vertical AI Deals — But Where Is the Antitrust Harm?

EconWorks Podcast ·

2026/10/07

In this episode of EconWorks we look at two big AI acquisitions—AMD’s deal for World Labs and Nvidia’s deal for Hugging Face. In both cases, chip firms are moving into adjacent parts of the AI stack, but they may be solving completely different economic problems. Nvidia may be buying downstream to drive demand for AI compute. More developers may mean more models, more applications, and eventually more computing demand. Maybe AMD is buying downstream for another reason: to see what future AI

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9:18

How Cartels Really Work, Episode 5: The Race to Confess

EconWorks Podcast ·

2026/10/06

A leniency program appears to generate a straightforward game theory problem for cartels. Suppose some firms agree to collude. Each wants to make cartel profits, but each knows that another cartel member may go to the government first and seek leniency. So what are you waiting for?If everyone wants to confess before everyone else, then backward induction makes the confession happen earlier and earlier. The logical prediction is surprising: the cartel should not form, in the end. But cartels do

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23:20

Why NVIDIA Is Betting $13 Billion on Open AI Models

EconWorks Podcast ·

2026/10/02

NVIDIA sells the computing power behind much of today’s AI boom. OpenAI and Anthropic are major sources of that demand. So why would NVIDIA spend nearly $13 billion acquiring Hugging Face, a platform that helps open models compete with them?This episode uses a simple three-layer AI structure—chips, model development, and developer toolkits—to examine the economics of the deal.Closed-model firms such as OpenAI and Anthropic integrate the model and toolkit layers. NVIDIA and Hugging Face would instead

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24:42

How Do You Enforce an Illegal Agreement?

EconWorks Podcast ·

2026/10/01

Cartel members have a weird contracting problem: they can have a deal, but they can't rely on normal contract law to enforce it. This means cartels have to police themselves. The episode explores why cartel members monitor one another, why cheating can be profitable for one cartel member, and why the threat of a return to competition can help sustain an anticompetitive agreement using the so-called shipping-container “Box Cartel.” The episode then moves to artificial intelligence. An AI system can

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8:44

Why NVIDIA Wants OpenAI to Have Competitors

EconWorks Podcast ·

2026/09/30

NVIDIA sells the chips that companies like Anthropic and Open AI use. Now it is spending almost $13 billion to acquire Hugging Face, one of the most important platforms for open AI models. Is NVDIA trying to prop up the competition against OpenAI and Anthropic? The economics are more compelling than just a foreclosure story. In this episode, we examine two forms of vertical integration through the lens of a simplified AI supply chain, consisting of **chips → model development → developer toolkit**

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8:09

How Do You Enforce an Illegal Agreement?

EconWorks Podcast ·

2026/09/29

The problem with a cartel is that its agreement is illegal. If a member of a cartel cheats, the other members can’t simply sue in court and get a judge to enforce the agreement. So cartels need their own systems of monitoring, detection, and punishment. On this episode of How Cartels Really Work, we take a look at the economics of cartel discipline through the alleged shipping-container “Box Cartel,” which allegedly used production quotas, financial penalties, and 87 cameras across 49 production

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21:25

When Delivery Meets Cash-and-Carry

EconWorks Podcast ·

2026/09/25

Sysco is planning to buy Jetro Restaurant Depot. But this is not a normal horizontal merger. Sysco delivers food to restaurants, mainly. Restaurant Depot operates cash-and-carry warehouse-based stores. Those channels may serve very different needs for large restaurant chains. Both, however, could be good choices for small, independent restaurants. That raises a simple antitrust question: do the two channels actually check each other? Maybe the answer lies in Sysco’s own experiment in Houston. Prior

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21:02

Can Data Reveal a Cartel? The Nasdaq Missing Eighths

EconWorks Podcast ·

2026/09/24

How can economists find a cartel if there is no agreement? Nasdaq stocks were quoted in eighths of a dollar in the early 1990s. But economists discovered that for many heavily traded stocks, half of those potential price increments were rarely used. This pattern became known as the Nasdaq “missing eighth.” The research was made public, the dealers acted quickly, and the spreads tightened. Later investigation unearthed evidence that reached far beyond the initial statistical anomaly. In Episode 3 of

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9:13

When Delivery Meets Cash-and-Carry: The Sysco–Jetro...

EconWorks Podcast ·

2026/09/23

The proposed acquisition of Jetro Restaurant Depot by Sysco seems very different from the failed merger between Sysco and US Foods. Sysco mainly ships food to restaurants. Restaurant Depot operates on a cash-and-carry basis, meaning the restaurant owners come and pick up the food themselves. But different channels don’t necessarily mean different competition. Delivery may be a must for a large restaurant or national chain. But for a smaller independent restaurant, the choice may be between paying

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8:42

Can Data Reveal a Cartel? | The Nasdaq Missing Eighths

EconWorks Podcast ·

2026/09/22

In the early 1990s, Nasdaq stocks were quoted in eighths of a dollar. $20.00, $20.125, $20.25, $20.375, etc.But economists William Christie and Paul Schultz found an odd pattern. For many actively traded stocks, market makers mostly used even eighths. Instead, prices acted as if quotes were changing in quarter-dollar increments.Why? Because?The empirical evidence alone cannot prove that dealers agreed to keep spreads wider. But once the research was released, odd-eighth quotes started to show up,

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15:41

When AI Replaces the Research Team

EconWorks Podcast ·

2026/09/18

To summarize, AI might soon grant a single researcher access to much of the capacity that used to belong to an entire academic team: theory, coding, empirical analysis, data work, writing, and project management. That opens a more profound question: what if every economist owns a research factory? This episode is about more than the simple idea that AI will help academics write more papers. Research factories are about efficiency, not output maximization. They could enable researchers to explore

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24:27

Why Price Fixing Is Easier to Describe Than to Prove

EconWorks Podcast ·

2026/09/17

Picture two gas stations across the street from each other. One increases its price. The other one follows. And it happens over and over again. The pattern looks funny. But does it prove price-fixing? In episode 2 of How Cartels Really Work, we explain why it is a lot harder to prove a cartel than it is to describe one. We follow six observations that make the hypothetical case incrementally more compelling: simultaneous price increases, repeated matching, prices rising independently of costs,

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10:59

What Happens When Every Economist Has a Research...

EconWorks Podcast ·

2026/09/16

What if every economist had an AI research factory? Academic research has often been a team effort, with complementary skills: theory, empirical work, coding, data management, writing, and project management.Many of those capabilities are increasingly available to a single researcher on demand via AI. But it doesn’t mean the aim is to produce as many papers as possible.In this episode, we explore how AI might change the organization of academic research, why Brooks’s Law remains true inside an AI

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8:38

Why Price Fixing Is Easier to Describe Than to Prove...

EconWorks Podcast ·

2026/09/15

Two gas stations simultaneously raise their prices. And then they do it again. Their prices have not changed much. Their owners have been even talking. Is that enough evidence of price-fixing?In episode 2 of How Cartels Really Work, we take a look at one of the key issues in cartel enforcement: the line between suspicious parallel behavior and evidence of an agreement.Starting with a simple example of a gas station, we move through six observations of increasing importance. This includes

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25:02

Zillow–Redfin: Keep the Cooperation, Restore the Rivalry

EconWorks Podcast ·

2026/09/11

The Zillow-Redfin case never went to court. Instead, the FTC, five states, Zillow, and Redfin agreed to a settlement that does something more interesting than just unwind the deal. Zillow can continue syndicating rental listings to Redfin, maintaining the cooperation the companies say yields efficiencies. But Redfin needs to rebuild its own rental-advertising business and re-emerge as an independent competitor. This episode asks what the settlement tells us about the economics of antitrust remedy

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21:39

How Cartels Really Work, Episode 1: What Makes...

EconWorks Podcast ·

2026/09/10

Two gas stations competing with each other charge $4.50 each. That alone does not tell us whether they formed a cartel. They may incur the same costs. They may react to each other’s prices independently. Repeated interaction may teach them not to start price wars. Economists might refer to the result as tacit collusion. Or they may have conspired to set prices. In the first episode of How Cartels Really Work, EconWorks explores the boundary between competition and cartel behavior—and why the

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8:32

Zillow–Redfin Settled: Who Actually Won?

EconWorks Podcast ·

2026/09/09

The antitrust case against Zillow and Redfin was scheduled to go to trial. The parties instead settled. The FTC did not kill the entire partnership. The companies will still syndicate rental listings to Redfin, maintaining the efficiencies they say benefit renters and property managers. But Redfin has to rebuild its independent rental advertising business and compete against Zillow again. Then who won? This episode goes deeper than the legal headlines and asks how it was economically feasible for

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6:53

How Cartels Really Work, Episode 1: What Makes...

EconWorks Podcast ·

2026/09/08

Two gas stations are using AI to price their gas. They both come out at $4.50. “That’s a cartel? Not always. Common costs, standard competitive interdependence, tacit collusion, and an agreement between the AI agents—or an old-fashioned agreement between the humans running the firms—could all result in the same price. In Episode 1 of How Cartels Really Work, EconWorks poses an apparently simple question: What is a cartel? We consider the difference between* parallel pricing, interdependence,*

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13:47

The Antitrust Theory That Slept for 55 Years

EconWorks Podcast ·

2026/09/04

What if you have a monopolist who, technically, allows customers to buy a product separately, but prices the standalone product so high that the only economically sensible thing to do is to take the bundle? That is the premise of **constructive tying**, an antitrust theory that was accepted decades ago but not often used since the early 1970s. The theory has been reinvigorated by the Second Circuit in Cumulus Media v. Nielsen. Cumulus was buying some local ratings from a competitor while trying to

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