Law Commons^™

Colluding Under The Radar: Achieving Collusion Through Vertical Exchange Of Information, Julia Shamir, Noam Shamir Recanati Graduate School Of Business, Tel Aviv University

Cleveland State Law Review

In the absence of antitrust regulations, rational profit-maximizing firms in an oligopoly may freely act in consort to reach a consensus and to maintain prices above the competitive level. However, in light of potential exposure to antitrust investigations and prospective heavy sanctions, firms attempt to achieve collusive outcomes without resorting to explicit agreements. One mechanism that may promote such tacit collusion is information-sharing; that is, the otherwise competing firms exchange their private information in order to set and maintain supra-competitive prices. Thus far, the attention of the antitrust authorities and scholars has focused on the phenomenon of horizontal information-sharing, i.e., …