3 ms·
Collusion in general doesn’t work if there’s not a mechanism to punish defection—or government regulation to prevent it! I don’t see what that mechanism or reg
by twoodfin 3y ago
Collusion in general doesn’t work if there’s not a mechanism to punish defection—or government regulation to prevent it!
I don’t see what that mechanism or regulation would be for, say, pork prices. It seems far more likely that accurately collated pricing information is simply driving efficiency for each individual supplier.
- Kinrany 3y agoIf all your competitors match your prices with no delay, lowering prices gives you no competitive advantage but makes your margins worse.
- Jensson 3y agoThat is just naive game theory. Humans can actually cooperate if cooperating makes everyone better off even if game theory says they shouldn't cooperate, has been tested and shown to be true over and over. So the question is if the companies collectively benefits from colluding? If yes then they probably will do so, at least when the number of competitors are small and inhouse alternatives are expensive.