COLLUSION OF FIRMS THEORY for MSC ECONOMICS, JNU, IGIDR, CUCET, CU, IIFT, BHU

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 oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole.
Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium. The act of collusion involves people or companies which would typically compete against one another, but who conspire to work together to gain an unfair market advantage. The colluding parties may collectively choose to influence the market supply of a good or agree to a specific pricing level which will help the partners maximize their profits at the detriment of other competitors.
Collusion can take many forms across different market types. In each scenario, groups collectively obtain an unfair advantage. One of the most common ways of colluding is price fixing. Price fixing occurs when there are a small number of companies, commonly referred to as an oligopoly, in a particular supply marketplace. This limited number of businesses offer the same product and form an agreement to set the price level. Prices may be forcibly lowered to drive out smaller competitors or may have an inflated level to support the interest of the group at a disadvantage to the buyer. Overall, price fixing can eliminate or reduce competition while also leading to even higher barriers for new entrants.
Collusion may also happen if companies synchronize their advertising campaigns. In this case, the partnering businesses may wish to limit the consumers’ knowledge about a product or service for an added advantage.

In the financial industry, collective partnering through the use of insider information can also be a type of collusion. Colluding groups may have the opportunity to gain several advantages through the sharing of private or preliminary information with one another. This financial collusion can allow the parties to enter and exit trades before the shared information is publicly available.
Collusion does not necessarily have to involve an explicit agreement or communication between firms. In oligopolistic industries, firms tend to be interdependent in their pricing and output decisions so that the actions of each firm impact on and result in a counter response by the other firm(s). In such circumstances, oligopolistic firms may take their rivals’ actions into account and coordinate their actions as if they were a cartel without an explicit or overt agreement. Such coordinated behaviour is often referred to as tacit collusion or conscious parallelism.

At Sourav Sir's Classes, we believe that a healthy environment and the right amount of work
helps a student achieve peak performance levels. So we have tried to invoke that spirit through the
various facilities available at our tuition study centers for all our programs.
Our faculty of highly qualified teachers and researchers have combed through several books and journals,
having collected and processed all the information so that it becomes easily accessible to the student.
The study material is prepared in a time tested fashion with the student kept in mind in such a fashion
that the student can catch up on the various topics in the event of missed lectures. The study notes are
designed in a fashion so as to complement the material discussed in our tuition classes. We have also
received an overwhelming response from the entire student community that, even if it is not possible for
students to attend tuition regularly, they can follow up easily. This is advantageous in when one is
self-studying for the entrance exams. Although the material provided is sufficient to crack the exam but
it is recommended that you attend classes in order to ace the exam and allow us to nurture your talent.
Besides the theory being extensively discussed, an enormous collection of problems has been added so
that the student can learn to apply the concepts over a diverse spectrum of difficulty. All the problems
have been worked out thoroughly so that in case the student gets stuck, we've got you covered!
For further information:
GIVE US A CALL / WHATSAPP AT +919836793076

VISIT OUR WEBSITE
FOR COMPLETE LECTURES / STUDY MATERIALS /NOTES
/GUIDENCE / PAST YEAR SOLVED +SAMPLE PAPAERS /TRICKS /MCQ /
SHORT CUT/ VIDEO LECTURES /LIVE + ONLINE CLASSES

Also find us at….
FACEBOOK
TWITTER
BLOGSPOT:
SLIDES ON COURSES
PICBEAR

MSC ECONOMICS,JNU,IGIDR,CUCET,CU,IIFT,BHU,Microeconomics,Macroeconomics,Economics theory,collusion meaning,collusion delusion,collusion oligopoly,collusion model,collusion economics,collusion examples,collusion econ,collusion economics a level,collusion economics definition,