EFFECT OF CONTRACT DISCLOSURE ON PRICE: RAILROAD GRAIN CONTRACTING IN THE PLAINS

The Staggers Rail Act of 1980 granted railroads freedom to establish rates and enter into confidential contracts with grain shippers. Recent legislation (1986) required that certain contract terms be disclosed. This study shows rail rates in the Plains region commenced an upward trend after implementation of the disclosure policy. Results suggest contract disclosure and increased reliance on posted tariffs facilitated rate coordination within the oligopolistic railroad industry.