This 1995 paper by Kathryn Graddy, published in The RAND Journal of Economics (Volume 26, Issue 1, pages 75-92), presents a study that tests for the presence of imperfect competition within the Fulton Fish Market.

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Kathryn Graddy is an economist at Brandeis University who specializes in industrial organization and how prices are set. [1, 2] She conducted a significant field study of the Fulton Fish Market to assess the real-world validity of the perfect competition model. [1, 2] Her research uncovered major departures from perfect competition, including a surprising finding on price discrimination: on average, Asian buyers were charged about 7% less than white buyers for the same fish, even though all the dealers were white. [9] This price discrepancy could not be explained by other transaction-related factors. [9] An interview with Graddy, linked in the video section, details her data collection methods and her findings regarding the competitive equilibrium model. [9]

Kathryn Graddy

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A study of the Fulton Fish Market found that dealers, who were all white, engaged in price discrimination based on the ethnicity of the buyer. [3, 9] While daily prices fluctuated due to variations in quality and supply, the study revealed a surprising and consistent pattern: on average, Asian buyers paid about 7% less per pound for whiting fish than white buyers. [3, 9] This price difference could not be attributed to any other observable factors in the transactions. [9] This practice was a deliberate profit-maximizing strategy, enabled by the buyers' lack of complete information about the prices others were paying. [2]

Price Discrimination in the Fulton Fish Market

This activity requires using the video featuring economist Kathryn Graddy to answer questions about her research on the Fulton Fish Market and its relation to the economic model of perfect competition.

Activity: Analyzing Perfect Competition using Kathryn Graddy's Research

This 2006 article by Kathryn Graddy, titled 'Markets: The Fulton Fish Market,' was published in the Journal of Economic Perspectives (Volume 20, Issue 2, pages 207-220). The paper provides a detailed analysis of the Fulton Fish Market.

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