A Secret Agreement Between Competing Businesses To Cooperate Is Called

According to the neoclassical theory of pricing and game theory, the independence of suppliers forces prices to a minimum, increases efficiency and reduces the ability of each company to determine prices. [6] However, if all companies agree on price increases, revenue losses will be minimized, as consumers will not have alternatives at lower prices and they will have to choose what is available. This benefits companies that accumulate because they generate more revenue at the expense of efficiency for society. [7] The Prisoner`s Dilemma is a specific game in game theory that shows why collaboration can be difficult for oligopolists to hold, even if it is beneficial for both parties. In the game, two members of a criminal gang are arrested and imprisoned. The prisoners are separated and left to see their possibilities. If both prisoners confess, each is serving a two-year prison sentence. If one confesses, but the other denies the act, the one who confessed becomes free, while the one who denied the crime received a three-year prison sentence. If both deny the crime, they will serve only one year in prison. Betraying the partner with a confession is the overriding strategy; This is the best strategy for each player, no matter how the other player plays. This is called the Nash balance. The result of the game is that the two prisoners follow an individual logic and betray if they had achieved a better result together, if they had both cooperated.

A lawyer probably indicated that there were no criminal charges characterized as “collusion”. But that doesn`t mean that collusion itself is legal. It`s just that federal crimes are things that stem from collusion rather than collusion itself. Several factors are deterresing. First, pricing in the United States is illegal and there are antitrust laws to prevent business-to-business agreements. Secondly, coordination between companies is difficult and the number of companies involved is all the more important. Third, there is a risk of overtaking. A company may agree to meet and then break the agreement, undermining the profits of the companies that still maintain the agreement. Finally, a company may be deterred from collusion if it is not able to effectively sanction companies that could break the agreement. Suddenly, there is an incentive to be the first to profess and go free. As everyone knows that the offer is made to the other, it becomes difficult to maintain the agreement, to remain calm. OPEC: OPEC oil-producing countries have been working temporarily to raise global oil prices to achieve a stable income.

Election interference The news has made a big deal about possible deals between the 2016 Trump campaign and the Russian government regarding damaging information about Hillary Clinton. Special investigator Robert Mueller finally released a report that was inconclusive on the allegations. Some of the charges stemmed from the Mueller report, but Attorney General William Barr did not recommend action against President Donald Trump. Despite this, the charge of “collusion” did not meet the legal definition of an unlawful act. If charges had been laid, they would probably have been for other reasons.

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