The buck stops where?

18 September 2004

In a thoughtful comment Amit says:

…students in the course can’t really be reasonably expected to have a detailed knowledge of competition law and hence we rely on what DPE say…

and I would agree with that; it would be unreasonable of DPE to expect students (commerce students?) to have detailed knowledge of the everyday law that governs commerce in New Zealand (Hmm, that sounds strangely wrong when I say it).

However, what I don’t accept is that we have to/need to tell students everything–producing “a guide on those [real world concepts] that are included (and their exact definitions as they apply to the game) in the black book” is wholely unrealistic. Part of what happens, in the simulation, and in the real world, is that we figure out what we don’t know.

When I first came to New Zealand, I went to a meeting at New Zealand Post in Wellington. I parked my car just outside their building. The meeting went well, but when I left the building, at 4:30, I couldn’t find my car. It was gone. As I looked around I round I say a sign–I’d seen it before, but I wondered if it was connected to my disappearing car. It said, “Clearway, Mon-Fri, 4:00pm–6:00pm”. I’d seen the sign when I parked, but we didn’t have clearways at that time in the UK, so I didn’t know what it meant. I was wrong. I shouldn’t have parked there. Eventually, I tracked down the company that had towed my car, paid the fines, and got my car back. It was my own fault. I accepted my mistake. It was one else’s fault. I didn’t feel I was hard done by. Actually, I was sorry that I had probably caused some traffic problems. If I didn’t understand the signs I should have asked. I didn’t go around saying “Before I entered this New Zealand they should have told me everything about it”. Rather, I learnt my lesson (and learned more about the NZ Road Code), and moved on.

I would hope that all of the students I spoke to about price-fixing would agree that I was unambiguous in saying ‘pricing-fixing would not be tolerated’. Some of those students would have heard that in Exec Meetings. Some of them would have heard it during one or more of the summits. Some of them would have heard it in one-on-one discussions. So, there is a pool of people out there who know that price fixing will not be tolerated (whatever that means). In the ‘real world’, even here in New Zealand, there have been a number of price fixing cases in the local news. (Let alone, Enron is the US.)

Perhaps, some students had also read about price-fixing in the press.

So, I think there were enough clear signs around.

If any of those students was unclear as to what price-fixing looks like, why it is important in a market based economy that prices are not fixed, or what are the penalties for price-fixing (either in the simulation or in the real world), they did not make themselves known to me. I have no idea what responsibility they took to clarify the matter and what responsibility they accept for what happened.

Likewise, mechanisms, against monopolistic behaviour (e.g. takeovers that would lead to dominate market positions) are built into the simulation, and yet, not a single student have ever questioned me as why they are there.

To often we rely on learning by our mistakes (see the Kolb Cycle), but we don’t always have to ‘suffer’ that way–we can notice the signposts and ask what they mean.

The reliance on the Commerce Act, in DPE’s ‘Commerce Commission’, was not as a source of detail; Our intent was to make people think, we should have known all of this. Rather, it was to show that we were not being arbitrary in our actions–that it was really a serious problem, not just in the simulation but also in the real world.

Finally, I wonder, if any team in Brazil wins, and gets the 5 per cent; will any other team believe that they won it fairly (despite the penalty).