The diamond cartel and de Beers:

Should the US be concerned about de Beers' actions?

Is deBeers anti-competitive?

Put another way, is de Beers breaking US law?

What is US law? (10 commandments by Oppenheimer).

How is de Beers breaking US law?

Does de Beers have monopoly power?

What does the demand for diamonds consist of? Is the demand elastic or inelastic and why?

What does the supply of diamonds look like? How elastic is the supply?

If you were to graph the history of the supply and demand of diamonds, how would you represent it?

In terms of the production process, what is deBeers' position?

What if anything should the US government do about this?

What kind of cost curve do diamond producers face?

Has the deBeers diamond cartel been a success? Why or why not?

What is unique about the diamond industry? Luxury product, natural resource, cost structure.

How sustainable is this cartel?

Who have been the winners and losers in the diamond cartel?

How does deBeers do on efficiency criteria?

Do diamonds hurt consumer welfare?

Who has a vested interest in maintaining it?

What are some of the geopolitical/race issues around the diamond industry?

Is de Beers a "truly African company" as Oppenheimer would suggest?

Is its illegality in the US the biggest obstacle de Beers faces?

Some background:

de Beers launched a massive advertising campaign in the early part of this century, to convince (US) consumers of the value and uniqueness of diamonds. Diamond engagement rings were not necessarily the norm before that time. At present the US represents almost half the world's diamonds (in jewelry).

More recently de Beers has attempted to create market power 1. by establishing the concept of a name brand diamond, 2. by renewed ad campaigns. A very recent spin on this, is that scientists have found a way to 'fingerprint' diamonds, arguing that each one is unique. What is the significance of this technological innovation?

de Beers has also stockpiled diamonds to maintain higher prices.