Game Theory and the Farmers Federation of Western North Carolina

Abstract

This case uses early 20th-century Southern Appalachia to explore the impact of cooperative marketing and antitrust exemption. Antitrust legislation in response to the age of the Robber Baron, namely the Sherman Antitrust Act and the Clayton Act, revolutionized the United States’ approach to industrial organization. However, various exemptions to these antitrust laws were granted in subsequent years. A look at the exemptions granted in the agricultural industry provides insight into early 20th-century life in Southern Appalachia as well as the changing industrial landscape of the United States as a whole. In addition, the case introduces pricing strategy and basic game theory. Antitrust exemption can allow for what is essentially a legally functioning cartel. This presents an example for students to see unique game-theoretical implications in application.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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