Look up collusion in Wiktionary, the free dictionary. Collusion is a term to refer to acts of cooperation or collaboration among rival entities. Wikipedia does not have an article with this exact name. ...
Wiktionary (from wiki and dictionary) is a multilingual, Web-based project to create a free content dictionary, available in over 150 languages. ...
This article is about cooperation as used in the social sciences. ...
Collaboration is the process wherein units work together to achieve outcomes for shared stakeholders, quicker and more cost effectively than if they worked on their own, without having to change the how codes of any of the participating Units. ...
Rival may mean: Rivalry between competing factions, as in sports teams. ...
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 form of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. Cartels are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion. Face-to-face trading interactions on the New York Stock Exchange trading floor. ...
Competition is the act of striving against another force for the purpose of achieving dominance or attaining a reward or goal, or out of a biological imperative such as survival. ...
In microeconomics, the main criteria by which one can distinguish between different market forms are: the number and size of producers and consumers in the market, the type of goods and services being traded, and the degree to which information can flow freely. ...
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). ...
A cartel is a group of legally independent producers whose goal it is to fix prices, limit supplies and limit competition. ...
Tacit collusion occurs when cartels are illegal or overt collusion is absent. ...
According to game theory, the independence of suppliers forces prices to their minimum, increasing efficiency and decreasing the price determining ability of each individual firm. If one firm decreases its price, other firms will follow suit in order to maintain sales, and if one firm increases its price, its rivals are unlikely to follow, as their sales would only decrease. These rules are used as the basis of kinked-demand theory. If firms collude to increase prices as a cooperative, however, 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. Game theory is often described as a branch of applied mathematics and economics that studies situations where players choose different actions in an attempt to maximize their returns. ...
In physics, force is an influence that may cause a body to accelerate. ...
There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ...
There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ...
Practices that facilitate tacit collusion include:
- Uniform prices
- A penalty for price discounts
- Advance notice of price changes
- Information exchanges
- Swaps and exchanges
Collusion is largely illegal in the United States (as well as Canada and most of the EU) due to antitrust law, but implicit collusion in the form of price leadership and tacit understandings still takes place. Several recent examples of collusion in the United States include: This article is about anti-competitive business behavior. ...
Price leadership is an observation made of oligopic business behavior in which one company, usually the dominant competitor among several leads the way in determining prices, the others soon following. ...
There are many ways that implicit collusion tends to develop: The examples and perspective in this article do not represent a worldwide view. ...
Lightning strikes during a night-time thunderstorm. ...
The 1960s decade refers to the years from January 1, 1960 to December 31, 1969, inclusive. ...
This article or section does not adequately cite its references or sources. ...
Baseball collusion refers to baseball owners working together to avoid competitive bidding for player services or player jointly negotiating with team owners. ...
The 1980s refers to the years of and between 1980 and 1989. ...
Students in Rome, Italy. ...
1993 (MCMXCIII) was a common year starting on Friday of the Gregorian calendar and marked the Beginning of the International Decade to Combat Racism and Racial Discrimination (1993-2003). ...
Sheep are commonly bred as livestock. ...
1996 (MCMXCVI) was a leap year starting on Monday of the Gregorian calendar, and was designated the International Year for the Eradication of Poverty. ...
- The practice of stock analyst conference calls and meetings of industry almost necessarily cause tremendous amounts of strategic and price transparency. This allows each firm to see how and why every other firm is pricing their products.
- If the practice of the industry causes more complicated pricing, which is hard for the consumer to understand (such as risk-based pricing, hidden taxes and fees in the wireless industry, negotiable pricing), this can cause competition based on price to be meaningless (because it would be too complicated to explain to the customer in a short advert). This causes industries to have essentially the same prices and compete on advertising and image, something theoretically as damaging to a consumer as normal price fixing.
There are significant barriers to collusion, however, under most circumstances. These include: Risk-based pricing is the practice in the financial services industry to charge different interest rates on the same loan to different people, depending on their credit score and other factors which make it seem like they are more likely to not pay back the loan. ...
- The number of firms: as the number of firms in an industry increases, it is more difficult to successfully organize and communicate.
- Cost and demand differences between firms: if costs vary significantly between firms, it may be impossible to establish a price at which to fix output.
- Cheating: there is considerable incentive to cheat on collusion agreements; though lowering prices might trigger price wars, in the short term the defecting firm may gain considerably.
- Potential entry: new firms may enter the industry, establishing a new baseline price and eliminating collusion (though anti-dumping laws and tariffs can prevent foreign companies entering the market).
- Economic recession: an increase in average total cost or a decrease in revenue provides incentive to compete with rival firms in order to secure a larger market share and increased demand.
Price war is a term used in business to indicate a state of intense competitive rivalry accompanied by a multi-lateral series of price reductions. ...
References - Vives, X. (1999) Oligopoly pricing, MIT Press, Cambridge MA (readable; suitable for advanced undergraduates.)
- Tirole, J. (1988) The Theory of Industrial Organization, MIT Press, Cambridge MA (An organized introduction to industrial organization)
- Tirole, J. (1986), "Hierarchies and Bureaucracies", Journal of Law Economics and Organization, vol. 2, pp.181-214.
- Tirole, J. (1992), "Collusion and the Theory of Organizations", Advances in Economic Theory: Proceedings of the Sixth World Congress of the Econometric Society, ed by J.-J. Laffont. Cambridge: Cambridge University Press, vol.2:151-206.
| view | Topics in game theory | | Definitions Game theory is often described as a branch of applied mathematics and economics that studies situations where players choose different actions in an attempt to maximize their returns. ...
| Normal form game · Extensive form game · Cooperative game · Information set · Preference In game theory, normal form is a way of describing a game. ...
It has been suggested that Game tree be merged into this article or section. ...
A cooperative game is a game where groups of players (coalitions) may enforce cooperative behaviour, hence the game is a competition between coalitions of players, rather than between individual players. ...
In game theory, an information set is a set that, for a particular player, establishes all the possible moves that could have taken place in the game so far, given what that player has observed so far. ...
Preference (or taste) is a concept, used in the social sciences, particularly economics. ...
| | Equilibrium concepts Price of market balance In economics, economic equilibrium is simply a state of the world where economic forces are balanced and in the abscence of external shocks the (equilibrium) values of economic variables will not change. ...
In game theory and economic modelling, a solution concept is a process via which equilibria of a game are identified. ...
| Nash equilibrium · Subgame perfection · Bayes-Nash · Trembling hand · Proper equilibrium · Epsilon-equilibrium · Correlated equilibrium · Sequential equilibrium · Quasi-perfect equilibrium · Evolutionarily stable strategy · Risk dominance In game theory, the Nash equilibrium (named after John Forbes Nash, who proposed it) is a kind of solution concept of a game involving two or more players, where no player has anything to gain by changing only his or her own strategy unilaterally. ...
Subgame perfect equilibrium is an economics term used in game theory to describe an equilibrium such that players strategies constitute a Nash equilibrium in every subgame of the original game. ...
In game theory, a Bayesian game is one in which information about characteristics of the other players (i. ...
The trembling hand perfection is a notion that eliminates actions of players that are unsafe because they were chosen through a slip of the hand. ...
Proper equilibrium is a refinement of Nash Equilibrium due to Roger B. Myerson. ...
In game theory, an Epsilon-equilibrium is a strategy profile that approximately satisfies the condition of Nash Equilibrium. ...
In game theory, a correlated equilibrium is a solution concept that is more general than the well known Nash equilibrium. ...
Sequential equilibrium is a refinement of Nash Equilibrium for extensive form games due to David M. Kreps and Robert Wilson. ...
Quasi-perfect equilibrium is a refinement of Nash Equilibrium for extensive form games due to Eric van Damme. ...
In game theory, an evolutionarily stable strategy (or ESS; also evolutionary stable strategy) is a strategy which if adopted by a population cannot be invaded by any competing alternative strategy. ...
Risk dominance and payoff dominance are two related refinements of the Nash equilibrium (NE) solution concept in game theory, defined by John Harsanyi and Reinhard Selten. ...
| | Strategies In game theory, a players strategy, in a game or a business situation, is a complete plan of action for whatever situation might arise; this fully determines the players behaviour. ...
| Dominant strategies · Mixed strategy · Tit for tat · Grim trigger In game theory, dominance occurs when one strategy is better or worse than another regardless of the strategies of a players opponents. ...
In game theory a mixed strategy is a strategy which chooses randomly between possible moves. ...
Tit for Tat is a highly-effective strategy in game theory for the iterated prisoners dilemma. ...
Grim Trigger is a trigger strategy in game theory for a repeated game, such as an iterated prisoners dilemma. ...
| | Classes of games | Symmetric game · Perfect information · Dynamic game · Repeated game · Signaling game · Cheap talk · Zero-sum game · Mechanism design · Stochastic game In game theory, a symmetric game is a game where the payoffs for playing a particular strategy depend only on the other strategies employed, not on who is playing them. ...
Perfect information is a term used in economics and game theory to describe a state of complete knowledge about the actions of other players that is instantaneously updated as new information arises. ...
In game theory, a sequential game is a game where one player chooses his action before the others chooses theirs. ...
In game theory, a repeated game (or iterated game) is an extensive form game which consists in some number of repetitions of some base game (called a stage game). ...
Signaling games are dynamic games with two players, the sender (S) and the receiver (R). ...
Cheap Talk is a term used in Game Theory for pre-play communication which carries no cost. ...
Zero-sum describes a situation in which a participants gain (or loss) is exactly balanced by the losses (or gains) of the other participant(s). ...
Mechanism design is a sub-field of game theory. ...
In game theory, a stochastic game is a competitive game with probabilistic transitions played by two players. ...
| | Games Game theory studies strategic interaction between individuals in situations called games. ...
| Prisoner's dilemma · Coordination game · Chicken · Dollar Auction ·Battle of the sexes · Stag hunt · Matching pennies · Ultimatum game · Minority game · Rock, Paper, Scissors · Pirate game · Dictator game · Public goods game · Nash bargaining game Will the two prisoners cooperate to minimize total loss of liberty or will one of them, trusting the other to cooperate, betray him so as to go free? In game theory, the prisoners dilemma is a type of non-zero-sum game in which two players can cooperate with...
In game theory, the Nash equilibrium (named after John Nash) is a kind of optimal strategy for games involving two or more players, whereby the players reach an outcome to mutual advantage. ...
It has been suggested that Peace war game be merged into this article or section. ...
On eBay, where an auction has a starting price of $1 ...
The Battle of the Sexes is a two player game used in game theory. ...
In game theory, the Stag Hunt is a game first discussed by Jean-Jacques Rousseau. ...
Matching Pennies is the name for a simple example game used in game theory. ...
The Ultimatum game is an experimental economics game in which two parties interact anonymously and only once, so reciprocation is not an issue. ...
Minority Game is a game proposed by Yi-Cheng Zhang and Damien Challet from the University of Fribourg. ...
It has been suggested that Janken be merged into this article or section. ...
The Pirate Game is a simple mathematical game. ...
The dictator game is a very simple game in experimental economics, similar to the ultimatum game. ...
The Public goods game is a standard of experimental economics; in the basic game subjects secretly choose how many of their private tokens to put into the public pot. ...
The Nash Bargaining Game is a simple two player game used to model bargaining interactions. ...
| | Theorems | Minimax theorem · Purification theorems · Folk theorem · Revelation principle · Arrow's Theorem Minimax is a method in decision theory for minimizing the expected maximum loss. ...
In game theory, the purification theorem was contributed by Nobel laurate John Harsanyi in 1973[1]. The theorem aims to justify a puzzling aspect of mixed strategy Nash equilibria: that each player is wholly indifferent amongst each of the actions he puts non-zero weight on, yet he mixes them...
In game theory, folk theorems are a class of theorems which imply that in repeated games, any outcome is a feasible solution concept, if under that outcome the players minimax conditions are satisfied. ...
The revelation principle of economics can be stated as, To any equilibrium of a game of incomplete information, there corresponds an associated revelation mechanism that has an equilibrium where the players truthfully report their types. ...
In voting systems, Arrow’s impossibility theorem, or Arrow’s paradox demonstrates the impossibility of designing a set of rules for social decision making that would meet all of a certain set of criteria. ...
| | Related topics | Mathematics · Economics · Behavioral economics · Evolutionary game theory · Population genetics · Behavioral ecology · Adaptive dynamics · List of game theorists · Social trap · Tragedy of the commons Euclid, Greek mathematician, 3rd century BC, as imagined by by Raphael in this detail from The School of Athens. ...
Face-to-face trading interactions on the New York Stock Exchange trading floor. ...
Nobel Prize in Economics winner Daniel Kahneman, was an important figure in the development of behavioral finance and economics and continues to write extensively in the field. ...
Evolutionary game theory (EGT) is the application of game theory in evolutionary biology. ...
Population genetics is the study of the distribution of and change in allele frequencies under the influence of the four evolutionary forces: natural selection, genetic drift, mutation, and migration. ...
Behavioral ecology is the study of the ecological and evolutionary basis for animal behavior, and the roles of behavior in enabling an animal to adapt to its environment (both intrinsic and extrinsic). ...
Adaptive Dynamics is a set of techniques for studying long-term phenotypical evolution developed during the 1990s. ...
This is a list of notable economists, mathematicians, political scientists, and computer scientists whose work has added substantially to the field of game theory. ...
Social trap is a term used by psychologists to describe a situation in which a group of people act to obtain short-term individual gains, which in the long run leads to a loss for the group as a whole. ...
It has been suggested that Tyranny of the Commons be merged into this article or section. ...
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