>The new input costs serve as a Schelling Point for competitors to collude without any actual communication between them. As long as someone doesn't actively de

>The new input costs serve as a Schelling Point for competitors to collude without any actual communication between them. As long as someone doesn't actively defect, the new price stands, and then it becomes the input for the next tier of suppliers (wholesalers, generally) to set prices. And once again it comes back to the same issue. This shows there is not adequate competition if a few players can collude in this way. Someone would defect, lower their price, and increase their market share in order to increase future profits at the expense of temporarily reduced current profit.