Podcast
Questions and Answers
Which of the following best describes tacit collusion?
Which of the following best describes tacit collusion?
- It requires firms to meet regularly to align prices.
- It occurs without explicit communication or agreements. (correct)
- It is highly detectable and easily proven.
- It relies on formal contracts between firms.
What is a common method to detect tacit collusion among firms?
What is a common method to detect tacit collusion among firms?
- Monitoring correlated price movements and patterns. (correct)
- Reviewing customer feedback on price changes.
- Observing sudden price drops during peak seasons.
- Analyzing production cost variations over time.
Which scenario is likely to lead to a finite time horizon in tacit collusion?
Which scenario is likely to lead to a finite time horizon in tacit collusion?
- Firms know when competition will cease. (correct)
- Firms are unaware of market exit opportunities.
- Firms operate in a constantly changing market.
- Firms agree to indefinite cooperation.
Why might correlated price movements among firms not be definitive proof of collusion?
Why might correlated price movements among firms not be definitive proof of collusion?
What is a primary goal of corporate leniency programmes?
What is a primary goal of corporate leniency programmes?
How do whistleblowing programmes contribute to law enforcement?
How do whistleblowing programmes contribute to law enforcement?
What effect do competition authorities aim to achieve through law enforcement against cartels?
What effect do competition authorities aim to achieve through law enforcement against cartels?
What is one way that tacit collusion impacts consumers?
What is one way that tacit collusion impacts consumers?
What is a distinguishing feature of tacit collusion compared to explicit collusion?
What is a distinguishing feature of tacit collusion compared to explicit collusion?
What does the stability of cartels depend on?
What does the stability of cartels depend on?
Which of the following best describes the primary risk of forming a cartel?
Which of the following best describes the primary risk of forming a cartel?
What is a possible externality of collusion on the market?
What is a possible externality of collusion on the market?
What is a primary reason for the instability of cartels?
What is a primary reason for the instability of cartels?
What is a challenge when verifying collusion among firms?
What is a challenge when verifying collusion among firms?
Which of the following statements reflects the 'indistinguishability theorem' in the context of collusion?
Which of the following statements reflects the 'indistinguishability theorem' in the context of collusion?
Which model is used to determine the behavior of firms in potential collusion scenarios?
Which model is used to determine the behavior of firms in potential collusion scenarios?
What problem often complicates the interpretation of results when detecting collusion?
What problem often complicates the interpretation of results when detecting collusion?
Flashcards
Tacit Collusion
Tacit Collusion
A form of collusion where firms implicitly coordinate their actions without explicit communication or agreements.
Detecting Tacit Collusion
Detecting Tacit Collusion
Monitoring price movements and patterns to identify potential collusion.
Finite Time Horizon in Collusion
Finite Time Horizon in Collusion
When firms have a clear understanding of when competitive behavior will resume.
Correlated Price Movements - Not Proof
Correlated Price Movements - Not Proof
Signup and view all the flashcards
Corporate Leniency Programmes
Corporate Leniency Programmes
Signup and view all the flashcards
Whistleblowing Programmes
Whistleblowing Programmes
Signup and view all the flashcards
Law Enforcement Against Cartels
Law Enforcement Against Cartels
Signup and view all the flashcards
Consumer Impacts of Tacit Collusion
Consumer Impacts of Tacit Collusion
Signup and view all the flashcards
Tacit vs. Explicit Collusion
Tacit vs. Explicit Collusion
Signup and view all the flashcards
Stability of Cartels
Stability of Cartels
Signup and view all the flashcards
Primary Risk of Forming a Cartel
Primary Risk of Forming a Cartel
Signup and view all the flashcards
Externalities of Collusion
Externalities of Collusion
Signup and view all the flashcards
Instability of Cartels
Instability of Cartels
Signup and view all the flashcards
Verification Challenges in Collusion
Verification Challenges in Collusion
Signup and view all the flashcards
Indistinguishability Theorem in Collusion
Indistinguishability Theorem in Collusion
Signup and view all the flashcards
Competitive vs Collusive Model
Competitive vs Collusive Model
Signup and view all the flashcards
Interpretation Challenges in Collusion
Interpretation Challenges in Collusion
Signup and view all the flashcards
