|
Collude
Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading or defrauding others of their legal right. Collusion is not always considered illegal. It can be used to attain objectives forbidden by law; for example, by defrauding or gaining an unfair market advantage. It is an agreement among firms or individuals to divide a market, set prices, limit production or limit opportunities. It can involve "unions, wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties". In legal terms, all acts effected by collusion are considered void (law), void. Definition In the study of economics and market competition, collusion takes place within an Industry (economics), industry when rival companies cooperate for their mutual benefit. Conspiracy usually involves an agreement between two or more sellers to take action to suppress competition between sellers in the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tacit Collusion
Tacit collusion is a collusion between competitors, which do not explicitly exchange information and achieving an agreement about coordination of conduct. There are two types of tacit collusion - concerted action and conscious parallelism. In a concerted action also known as concerted activity, competitors exchange some information without reaching any explicit agreement, while conscious parallelism implies no communication. In both types of tacit collusion, competitors agree to play a certain strategy ''without explicitly saying so''. It is also referred to as oligopolistic price coordination or tacit parallelism. A dataset of gasoline prices of BP, Caltex, Woolworths, Coles, and Gull from Perth gathered in the years 2001 to 2015 was used to show by statistical analysis the tacit collusion between these retailers. BP emerged as a price leader and influenced the behavior of the competitors. As result, the timing of price jumps became coordinated and the margins started to grow ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. The intent of price fixing may be to push the price of a product as high as possible, generally leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied. Price fixing requires a conspiracy between sellers or buyers. The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed-to minimum price; buy the product from a supplier at a specified maxi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Oligopoly
An oligopoly (from Greek ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure in which a market or industry is dominated by a small number of large sellers or producers. Oligopolies often result from the desire to maximize profits, which can lead to collusion between companies. This reduces competition, increases prices for consumers, and lowers wages for employees. Many industries have been cited as oligopolistic, including civil aviation, electricity providers, the telecommunications sector, Rail freight markets, food processing, funeral services, sugar refining, beer making, pulp and paper making, and automobile manufacturing. Most countries have laws outlawing anti-competitive behavior. EU competition law prohibits anti-competitive practices such as price-fixing and manipulating market supply and trade among competitors. In the US, the United States Department of Justice Antitrust Division and the Federal Trade Commis ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Structure
Market structure, in economics, depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. Market structure makes it easier to understand the characteristics of diverse markets. The main body of the market is composed of suppliers and demanders. Both parties are equal and indispensable. The market structure determines the price formation method of the market. Suppliers and Demanders (sellers and buyers) will aim to find a price that both parties can accept creating a equilibrium quantity. Market definition is an important issue for regulators facing changes in market structure, which needs to be determined. The relationship between buyers and sellers as the main body of the market includes three situations: the relationship between sellers (enterprises and enterprises), the relationship between buyers (enterprises or consumers) and the relationship be ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cartel
A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market. Cartels are usually associations in the same sphere of business, and thus an alliance of rivals. Most jurisdictions consider it anti-competitive behavior and have outlawed such practices. Cartel behavior includes price fixing, bid rigging, and reductions in output. The doctrine in economics that analyzes cartels is cartel theory. Cartels are distinguished from other forms of collusion or anti-competitive organization such as corporate mergers. Etymology The word ''cartel'' comes from the Italian word '' cartello'', which means a "leaf of paper" or "placard", and is itself derived from the Latin ''charta'' meaning "card". The Italian word became ''cartel'' in Middle French, which was borrowed into English. In English, the word was originally used for a written agreement between warring nations to regulate the treatment and exchange of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bid Rigging
Bid rigging is a fraudulent scheme in procurement auctions resulting in non-competitive bids and can be performed by corrupt officials, by firms in an orchestrated act of collusion, or between officials and firms. This form of collusion is illegal in most countries. It is a form of price fixing and market allocation, often practiced where contracts are determined by a call for bids, for example in the case of government construction contracts. The typical objective of bid rigging is to enable the "winning" party to obtain contracts at uncompetitive prices (i.e., at higher prices if they are sellers, or lower prices if they are buyers). The other parties are compensated in various ways, for example, by cash payments, or by being designated to be the "winning" bidder on other contracts, or by an arrangement where some parts of the successful bidder's contract will be subcontracted to them. In this way, they "share the spoils" among themselves. Bid rigging almost always results in econ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividing Territories
Dividing territories (also market division) is an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories. The process known as geographic market allocation is one of several anti-competitive practices outlawed under United States antitrust laws. The term is generally understood to include dividing customers as well. For example, in 1984, FMC Corp. and Asahi Chemical agreed to divide territories for the sale of microcrystalline cellulose, and later FMC attempted to eliminate all vestiges of competition by inviting smaller rivals also to collude. See also * Horizontal territorial allocation *Regional lockout *Market allocation scheme Market allocation or market division schemes are agreements in which competitors divide markets among themselves. In such schemes, competing firms allocate specific customers or types of customers, products, or territories among themselves. For ex ... References Anti-competitive practice ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tying (commerce)
Tying (informally, product tying) is the practice of selling one product or service as a mandatory addition to the purchase of a different product or service. In legal terms, a ''tying sale'' makes the sale of one good (the ''tying good'') to the de facto customer (or de jure customer) conditional on the purchase of a second distinctive good (the ''tied good''). Tying is often illegal when the products are not naturally related. It is related to but distinct from freebie marketing, a common (and legal) method of giving away (or selling at a substantial discount) one item to ensure a continual flow of sales of another related item. Some kinds of tying, especially by contract, have historically been regarded as anti-competitive practices. The basic idea is that consumers are harmed by being forced to buy an undesired good (the tied good) in order to purchase a good they actually want (the tying good), and so would prefer that the goods be sold separately. The company doing this b ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Leniency Programs
Mercy (Middle English, from Anglo-French ''merci'', from Medieval Latin ''merced-'', ''merces'', from Latin, "price paid, wages", from ''merc-'', ''merxi'' "merchandise") is benevolence, forgiveness, and kindness in a variety of ethical, religious, social, and legal contexts. In the social and legal context, mercy may refer both to compassionate behavior on the part of those in power (e.g. mercy shown by a judge toward a convict), or on the part of a humanitarian third party, e.g., a mission of mercy aiming to treat war victims.Sarat, Austin and Hussain, Nasser. ''Forgiveness, mercy, and clemency'', 2006 pp. 1-5Menke, Christopher. ''Reflections of equality'' by Christoph Menke 2006 p. 193 Definition "Mercy" can be defined as "compassion or forbearance shown especially to an offender or to one subject to one's power"; and also "a blessing that is an act of divine favor or compassion." "To be at someone's mercy" indicates a person being "without defense against someone." L ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Kickback (bribery)
A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between agents of the two parties, rather than one party extorting the bribe from the other.Wrage, Alexandra Addison. ''Bribery and Extortion: Undermining Business, Governments, and Security.'' Westport, Conn.: Praeger Security International, 2007. p. 14. The purpose of the kickback is usually to encourage the other party to cooperate in the scheme.Kranacher, Riley, and Wells, p. 387. The term "kickback" comes from colloquial English language, and describes the way a recipient of illegal gain "kicks back" a portion of it to another person for that person's assistance in obtaining it.Campos, p. 299. Types and methods The most common form of kickback involves a vendor s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Competition
Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, individuals, economic and social groups, etc. The rivalry can be over attainment of any exclusive goal, including recognition: Competition occurs in nature, between living organisms which co-exist in the same environment. Animals compete over water supplies, food, mates, and other biological resources. Humans usually compete for food and mates, though when these needs are met deep rivalries often arise over the pursuit of wealth, power, prestige, and fame when in a static, repetitive, or unchanging environment. Competition is a major tenet of market economies and business, often associated with business competition as companies are in competition with at least one other firm over the same group of customers. Competition inside a company is ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Product Bundling
In marketing, product bundling is offering several products or services for sale as one combined product or service package. It is a common feature in many imperfectly competitive product and service markets. Industries engaged in the practice include telecommunications services, financial services, health care, information, and consumer electronics. A software bundle might include a word processor, spreadsheet, and presentation program into a single office suite. The cable television industry often bundles many TV and movie channels into a single tier or package. The fast food industry combines separate food items into a "meal deal" or "value meal". A bundle of products may be called a package deal, in recorded music or video games, a compilation or box set, or in publishing, an anthology. Most firms are multi-product or multi-service companies faced with the decision whether to sell products or services separately at individual prices or whether combinations of products s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
