The court case I chose was United States of America v. Ira Eisenberg. I thought this case was interesting because it is about buying properties, flipping them, and then reselling them for a profit. I think this a fairly lucrative business within itself, but this case is about a man who wanted more. It is about bid-rigging which always seemed interesting when it was talked about in class, so it is intriguing to see the consequences of it in real life. The case was opened on December 14, 2015. Unfortunately, online there is not much information on Ira himself. All I was able to infer was her was a real estate investor from the Atlanta, Georgia area. The industry he was operating in was the real estate business in Georgia. According to the background …show more content…
Eisenberg specifically was charged for violating the Sherman Act, Title 15, United States Code, Section 1. The men hindered competition in the auctions by not bidding creating low purchasing prices. The case of United States v. Ira Eisenberg is relevant to economics because it demonstrates a form of collusion. Ira and his co-conspirators are price fixing, so they have to pay the lowest price possible. In performing these anti-competitive actions, the men responsible decreased competition in this foreclosure realty market. So instead of the price being subject to the supply and demand curve and adjusting, the bidders get to decide how much they are willing to pay for it. In order to think about how this affected the economy, I think of a simple supply and demand curve, but on the curve I see a horizontal line at a low p. This is the price the bidders chose to pay. Then I think of the shifts in the surpluses for this graph, what was about a fifty-fifty split is now almost all producer (bidder) surplus. This means the consumer (the homeowner and mortgage owner) would not receive the proper compensation for the good. They are being cheated out of money that would more than likely be invested back into the economy instead of lining some realtors