Feds Find a Chicken Conspiracy

I started reading yesterday’s federal indictment of four chicken-company executives for antitrust conspiracy, and I got excited when I got to paragraph 7:

Aha, I thought, I know this one. There are indexes that report the market price of chicken. Long-term chicken supply contracts are often priced off of an index: A restaurant chain will agree to pay a chicken producer “market” (the index price), or “market plus 10” cents, or whatever. The indexes are calculated by, essentially, calling up buyers and sellers of chicken and asking them how much they are paying or receiving for chicken.1 If you are a chicken producer with a contract to sell chickens at the index price, and someone from the index provider calls you up asking you what the price should be, you have an incentive to quote a high number. If the index price goes up, the price you are paid on your contract will go up. Quoting the high number doesn’t cost you anything—you are just saying a number over the phone to someone who is writing it down—and it makes you money, so you'll be tempted to do it.