Share This Article:

Economic Definition of implicit collusion. Defined.

Offline Version: PDF

Term implicit collusion Definition: Seemingly independent, but parallel actions among competing firms (mostly oligopolistic firms) in an industry that achieve higher prices and profits, much as if guided by an explicit collusion agreement. Also termed tacit collusion, the distinguishing feature of implicit collusion is the lack of any explicit agreement. They key is that each firm seems to be acting independently, perhaps each responding to the same market conditions, but the end result is the same as an explicit agreement. This should be contrasted with explicit or overt collusion that does involve a formal, explicit agreement.

 

« implementation lag | implicit cost »

Permalink: http://glossary.econguru.com/economic-term/implicit+collusion

Alphabetical Reference to Over 2,000 Economic Terms