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    Difference between a cartel and tacit collusion?

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    Very similar definitions, anyone know the difference? They both go along the lines of an illegal agreement between 2 firms such as price fixing etc.


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    David

    15 Comments

    wikipedia is helpful for that sort of thing -

    ]Cartel

    ]Tacit collusion

    Original Poster Banned

    kelly_o_fanatic;5252385

    wikipedia is helpful for that sort of thing - ]Cartel]Tacit collusion



    Thanks, but I've had a look at that and I'm still very confused.;-)

    cartel is when they agree prices and productions

    tacit is when they do it but without agreement

    i think

    Anybody would think there's exams on at the moment with all of these threads......

    Original Poster Banned

    sancho1983;5252488

    Anybody would think there's exams on at the moment with all of these … Anybody would think there's exams on at the moment with all of these threads......:)



    Lol, ye Economics Wed. Just wanted to clear a few things up, as I'm doing pretty well otherwise.

    A cartel is a formal agreement between companies to control the price of a commodity or product etc - like OPEC. Tacit collusion occurs when companies make an informal agreement to fix prices (i.e. they do this without letting their competitors or official bodies know). Your confusion might arise from the fact that members of a Cartel (an officially organised group) can still engage in unofficial agreements (tacit collusion), although it is usually firms outside a cartel who do this.

    Original Poster Banned

    Liddle ol' me;5252575

    A cartel is a formal agreement between companies to control the price of … A cartel is a formal agreement between companies to control the price of a commodity or product etc - like OPEC. Tacit collusion occurs when companies make an informal agreement to fix prices (i.e. they do this without letting their competitors or official bodies know). Your confusion might arise from the fact that members of a Cartel (an officially organised group) can still engage in unofficial agreements (tacit collusion), although it is usually firms outside a cartel who do this.



    Cartel (formal/official-legal), tacit collusion (informal/underhand-illegal)

    Yes?

    davidhurn;5252616

    Cartel (formal/official-legal), tacit collusion … Cartel (formal/official-legal), tacit collusion (informal/underhand-illegal)Yes?



    [COLOR="Red"]NO!!!![/COLOR]

    Cartels are not legal!!!!

    kelly_o_fanatic;5252671

    [COLOR="Red"]NO!!!![/COLOR]Cartels are not legal!!!!



    Yes they are - OPEC is a Cartel

    Original Poster Banned

    When a firms act as if they had an agreement this is called?

    a. tacit collusion
    b. a cartel


    Confused...

    davidhurn;5252616

    Cartel (formal/official-legal), tacit collusion … Cartel (formal/official-legal), tacit collusion (informal/underhand-illegal)Yes?



    That's the guts of it yes.

    There are 2 types of cartel, public and private, private cartels are illegal, public cartels are legal.

    davidhurn;5252724

    When a firms act as if they had an agreement this is called?a. tacit … When a firms act as if they had an agreement this is called?a. tacit collusionb. a cartelConfused...



    Tacit collusion - but it remains hidden. hence the word 'acts' and 'as if' in the question (i.e. it 'looks like', but there is no proof).

    kelly_o_fanatic;5252743

    There are 2 types of cartel, public and private, private cartels are … There are 2 types of cartel, public and private, private cartels are illegal, public cartels are legal.



    Stop confusing him further. They are sometimes viewed as illegal but it's a distinction hardly discussed in economics ...

    EDIT: To clarify: in this discussion of Cartels V tacit agreement , the latter is the illegal one (it could otherwise be referred to as a private cartel I suppose, although that term is not as widely used and is unlikely to figure in an exam question)

    Liddle ol' me;5252815

    Stop confusing him further. They are sometimes viewed as illegal but it's … Stop confusing him further. They are sometimes viewed as illegal but it's a distinction hardly discussed in economics ...EDIT: To clarify: in this discussion of Cartels V tacit agreement , the latter is the illegal one (and could be otherwise known as a private cartel I suppose)



    Fine, I'll shut up. One of my exam questions was based on a situation where supermarkets got together to raise the price of a certain item. definitely not legal. I guess my exam paper was just the exception...

    Good luck on your exam davidhurn
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