What did Jean Tirole win the Nobel Prize for?
Jean Tirole, (born August 9, 1953, Troyes, France), French economist who was awarded the 2014 Nobel Prize for Economics in recognition of his innovative contributions to the study of monopolistic industries, or industries that consist of only a few powerful firms.
Can tacit collusion lead to price wars?
Tacit collusion can involve price wars on the equi- librium path. Explicit collusion involves firms secretly sharing their private information to avoid such price wars, but this is illegal and runs the risk of sanctions.
What is tacit collusion in economics?
Tacit collusion is unspoken actions between oligopolistic firms that are likely to minimise a competitive response. For example, two firms may decide to avoid price cutting or not attacking each other’s market share.
Is tacit collusion good?
This practice can be harmful to consumers who, if the market power of the firm is used, can be forced to pay monopoly prices for goods that should be selling for only a little more than the cost of production. Nevertheless, it is very hard to prosecute because it may occur without any collusion between the competitors.
When was Amartya Sen awarded with Nobel Prize?
In 1998, Sen received the Prize in Economic Sciences in Memory of Alfred Nobel for his theoretical, field, and ethics work in welfare economics and for his research advancing the understanding of social-choice theory, poverty, and the measurement of welfare.
What do you mean by industrial Organisation?
Industrial organization is an analysis of factors, operational or otherwise, that contribute to a firm’s overall strategy and product placement. It involves a study of different areas, from market power to product differentiation to industrial policy, that affect a firm’s operations.
Is conscious parallelism illegal?
Unlike price-fixing which involves conscious agreement between competitors and violating antitrust laws, conscious parallelism occurs where businesses just change prices in reaction to competitors, and conscious parallelism does not constitute illegal activity on its own.
Is parallel pricing illegal?
Absent an anti-competitive agreement, however, the algorithm’s market monitoring function may simply enable firms to observe and match competitors’ prices. This type of parallel pricing is not illegal just as it would not be illegal if achieved without the help of a pricing algorithm.
What is cartel and collusion?
Definition Collusion is conduct in which rival. firms cooperate with each other over time to. raise prices above competitive levels through coordinated action. A cartel is a group of firms that conspire to reach an agreement over such conduct by explicitly communicating with each other.
Why is collusion bad?
Collusion is seen as bad for consumers and economic welfare, and therefore collusion is mostly regulated by governments. Collusion can lead to: High prices for consumers. This leads to a decline in consumer surplus and allocative inefficiency (Price pushed up above marginal cost)
When was Amrita born?
November 3, 1933 (age 88 years)Amartya Sen / Date of birth