Strategic Management and Competitive Advantage: Concepts and Cases, 6th Edition by Pearson

CHAPTER 7

Collusion

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

1. 7.1 Define explicit and tacit collusion and explain why collusion is typically inconsistent with social welfare in an economy.
2. 7.2 Describe how collusion can create economic profits.
3. 7.3 Describe different ways that collusive agreements can fall apart, and how it is possible to use the attributes of an industry to anticipate how sustainable these agreements are likely to be.
4. 7.4 Describe two unique challenges associated with organizing to implement a collusion strategy.

A Gas Station Conundrum

Consider the following scenario. Think of it as a chance to apply all the theories and frameworks discussed in this text so far.

You own and operate a gas station ...