Page 1 of 20 - About 198 Essays
  • Frankenstein And Suslow's Theory

    Margaret Levenstein and Valerie Suslow seek out what determines a business cartel’s success. They reject the assumption of many economists that the main reason cartels fail comes from cheating firms, which undermine attempts by cartels to collude to raise prices and restrict output. They believe that cheating is just one facet of how a cartel can fail and not the main reason. To answer their question, Levenstein and Suslow attempt to answer four other research questions: 1. Can cartels succeed? 2. How long do cartels last? 3. What impact do cartels have? 4. What causes a cartel to break up or fail? Using a variety of quantitative evidence, Levenstein and Suslow use these questions to determine what aids in a cartels success. They contend that while many cartels fail, many do succeed, and their success stems from how they can collaborate, deter cheating, and bar entry by other firms. Levenstein and Suslow admit that since cartels are usually secretive and illegal, their empirical evidence is limited and cannot be based on random samples. Most of the evidence is extracted from law enforcement prosecutors and governments that allow cartels to reside. They both agree that it is difficult to guess the success of cartels because of their secretiveness and ability to stay under the radar of regulatory agencies. However, Levenstien and Suslow pull a great deal of data from the cases they have and create a strong argument for how cartels succeed despite the limited amount of case…

    Words: 1571 - Pages: 7
  • Lysine Collusion Case Study

    Contingent factors that helped and allowed for collusion. One of the most obvious factors facilitating the lysine collusion was the number of the companies operating on this market. As we already told there were only 5 major players on lysine market. The small number of firms allowed them to negotiate and reach to an agreement much easier than if it would be a competitive market with many firms. Furthermore it was easier to coordinate their activities and to adjust their strategies according to…

    Words: 707 - Pages: 3
  • Leadership And Self-Deception Book Analysis

    In Leadership and Self-Deception, the book reminds leaders to see people as people and not objects. Through a narrative story, Bud, Lou and Kate teach Tom several important principles including: the concept of the box, collusion, and how to get out of the box. These principles laid the foundation for the overarching lesson from the book which is that as a leader who does or does not possess these qualities will have an effect on the culture of the organization we are leading. The concept of…

    Words: 1026 - Pages: 5
  • Pushing The Limits Analysis

    Politicians and regulators therefore have to keep a close eye on oligopolists and make sure that they don’t become to powerful. In some cases, oligopolists try to further increase their profits by engaging in cooperative behaviour like collusion. Oligopolists sometimes try to make deals to purposely restrict their supply and increase their prices. These type of collaborations are illegal and oligopolists therefore turn to tacit collusion. This means that they make these agreements without…

    Words: 774 - Pages: 4
  • The Role Of Pricing In An Oligopoly

    lengths the supermarkets will go to, but they will also use their power within the market to make it as hard as possible to enter the market. Other barriers are the extremely low prices that Coles and Woolworths can set due to the control they have over their suppliers, there revenue isn’t effected but new firms cannot compete. Pricing, Interdependence and Price Rigidty in Supermarket Industry As discussed in the above section pricing in an oplipgoly is complicated. Firms don’t want to lose…

    Words: 1061 - Pages: 5
  • Business Strategy Essay

    There are many types of cooperative strategies such as collusion, and strategy alliances. Collusion It is an active cooperation of firms within an industry to diminish output and increase prices to avoid the normal economic law of demand and supply. An explicit collusion is illegal in many countries and in regional trade association. Explicit collusion can be express in which case firm directly using communication and negotiation, or indirectly through an informal system of signals…

    Words: 1019 - Pages: 5
  • Difference Between Market Structure And Oligopoly

    markets. The incentive to collude is often explained by various factors. One of the objectives is for both firms to increase its market powers or prevent price/revenue instability in the industry. Firms also seek to achieve joint profit maximization within the market, jointly working together to determine the level of output each firm will produce and/or the price set by each firm. This is done so firms can operate as a monopoly and earn monopoly profits. When collusion occurs, existing firms…

    Words: 2031 - Pages: 9
  • Telephone Market Oligopoly Essay

    decisions of a firm, considering the competitors possible decisions to, not only about the specific x theme, but also their responses to my decision; and what final decision may produce to me more profits, or payoff. These game or these possibilities analysis must be do frequently, because the competitors and the market itself keeps moving and changing. The most frequently used is the Prisoner´s dilemma model, about it we are going to present an example. Knowing the hard competition…

    Words: 1337 - Pages: 6
  • Why Do Firms Compete Under Bertrand Competition?

    Raymond Deneckere and Carl Davidson. This paper examines why firms want to collude while producing differentiated products under price competition. The size of the merger and associated size of profits are positively related. The desire to merge under Bertrand competition depends on the interaction between two main forces: capturing negative externality and extracting a spiral of responses from other firms. The first one is always beneficial irrespective of whether firms compete in prices or…

    Words: 1159 - Pages: 5
  • Price Fixing On A Free Market Essay

    the Union’s common market. This paper will explore the European truck manufacturer’s cartel case. The truck manufacture’s collusion to fix their prices and the actions taken by the EU commission against the truck cartel will be examined. It aims to demonstrate the effects of price fixing on a free market. How does price fixing affect free markets? This paper is in two section: Section 1 discusses in brief of what is a cartel. The history of EU’s truck cartel formation until its dissolution…

    Words: 1188 - Pages: 5
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