Changes

==Origin==

==Origin==

[https://nordan.daynal.org/wiki/index.php?title=English#ca._1100-1500_.09THE_MIDDLE_ENGLISH_PERIOD Middle English], from Anglo-French, from [[Latin]] ''collusion''-, ''collusio'', from ''colludere''

[https://nordan.daynal.org/wiki/index.php?title=English#ca._1100-1500_.09THE_MIDDLE_ENGLISH_PERIOD Middle English], from Anglo-French, from [[Latin]] ''collusion''-, ''collusio'', from ''colludere''

*[http://en.wikipedia.org/wiki/14th_century 14th Century]

*[https://en.wikipedia.org/wiki/14th_century 14th Century]

==Definition==

==Definition==

*1: [[secret]] [[agreement]] or [[cooperation]] especially for an illegal or [[deceitful]] [[purpose]]

*1: [[secret]] [[agreement]] or [[cooperation]] especially for an illegal or [[deceitful]] [[purpose]]

'''Collusion''' is an agreement between two or more parties, sometimes illegal and therefore [[secretive]], to [[limit]] open [[competition]] by deceiving, misleading, or de[[fraud]]ing others of their legal rights, or to obtain an [[objective]] forbidden by [[law]] typically by defrauding or gaining an unfair [[advantage]]. It is an agreement among firms or [[individuals]] to divide a [[market]], set prices, limit production or limit [[opportunities]]. It can involve "wage fixing, kickbacks, or misrepresenting the [[independence]] of the [[relationship]] between the colluding parties". In legal terms, all acts affected by collusion are considered void.

'''Collusion''' is an agreement between two or more parties, sometimes illegal and therefore [[secretive]], to [[limit]] open [[competition]] by deceiving, misleading, or de[[fraud]]ing others of their legal rights, or to obtain an [[objective]] forbidden by [[law]] typically by defrauding or gaining an unfair [[advantage]]. It is an agreement among firms or [[individuals]] to divide a [[market]], set prices, limit production or limit [[opportunities]]. It can involve "wage fixing, kickbacks, or misrepresenting the [[independence]] of the [[relationship]] between the colluding parties". In legal terms, all acts affected by collusion are considered void.

In the study of [[economics]] and market [[competition]], collusion takes place within an [[industry]] when rival companies [[cooperate]] for their mutual benefit. Collusion most often takes place within the market structure of [http://en.wikipedia.org/wiki/Oligopoly oligopoly], where the [[decision]] of a few firms to collude can significantly impact the market as a whole. [http://en.wikipedia.org/wiki/Cartel Cartels] are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion.

In the study of [[economics]] and market [[competition]], collusion takes place within an [[industry]] when rival companies [[cooperate]] for their mutual benefit. Collusion most often takes place within the market structure of [https://en.wikipedia.org/wiki/Oligopoly oligopoly], where the [[decision]] of a few firms to collude can significantly impact the market as a whole. [https://en.wikipedia.org/wiki/Cartel Cartels] are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion.

According to [http://en.wikipedia.org/wiki/Neoclassical_economics neoclassical price-determination theory] and [http://en.wikipedia.org/wiki/Game_theory game theory], the [[independence]] of suppliers forces prices to their minimum, increasing efficiency and decreasing the price determining [[ability]] of each individual firm. However, if firms collude to all increase prices, loss of sales is minimized, as consumers lack alternative [[choices]] at lower prices. This benefits the colluding firms at the cost of [[efficiency]] to [[society]].

According to [https://en.wikipedia.org/wiki/Neoclassical_economics neoclassical price-determination theory] and [https://en.wikipedia.org/wiki/Game_theory game theory], the [[independence]] of suppliers forces prices to their minimum, increasing efficiency and decreasing the price determining [[ability]] of each individual firm. However, if firms collude to all increase prices, loss of sales is minimized, as consumers lack alternative [[choices]] at lower prices. This benefits the colluding firms at the cost of [[efficiency]] to [[society]].

One variation of this traditional theory is the theory of [http://en.wikipedia.org/wiki/Kinked_demand kinked demand]. Firms face a kinked demand curve if, when one firm decreases its price, other firms will follow suit in order to maintain sales, and when one firm increases its price, its rivals are unlikely to follow, as they would lose the sales' gains that they would otherwise get by holding prices at the previous level. Kinked demand [[potentially]] fosters [http://en.wikipedia.org/wiki/Supra-competitive_prices supra-competitive prices] because any one firm would receive a reduced benefit from cutting price, as opposed to the benefits accruing under neoclassical theory and certain game theoretic models such as [http://en.wikipedia.org/wiki/Bertrand_competition Bertrand competition].[http://en.wikipedia.org/wiki/Collusion]

One variation of this traditional theory is the theory of [https://en.wikipedia.org/wiki/Kinked_demand kinked demand]. Firms face a kinked demand curve if, when one firm decreases its price, other firms will follow suit in order to maintain sales, and when one firm increases its price, its rivals are unlikely to follow, as they would lose the sales' gains that they would otherwise get by holding prices at the previous level. Kinked demand [[potentially]] fosters [https://en.wikipedia.org/wiki/Supra-competitive_prices supra-competitive prices] because any one firm would receive a reduced benefit from cutting price, as opposed to the benefits accruing under neoclassical theory and certain game theoretic models such as [https://en.wikipedia.org/wiki/Bertrand_competition Bertrand competition].[https://en.wikipedia.org/wiki/Collusion]

[[Category: Law]]

[[Category: Law]]

[[Category: Economics]]

[[Category: Economics]]