Legal Definitions - tacit collusion

Definition: Tacit collusion, also known as conscious parallelism, is when two or more businesses in a concentrated market intentionally engage in monopolistic conduct. This can include oligopolistic price coordination.

Examples: An example of tacit collusion could be two gas stations in a small town consistently pricing their gasoline at the same rate, even though they are not communicating with each other. Another example could be two airlines offering the same prices for flights on the same route, even though they are not working together.

Explanation: In both examples, the businesses are engaging in similar pricing strategies without directly communicating with each other. This can create an environment where competition is limited, and prices remain high. This behavior can be illegal under antitrust laws, as it can harm consumers and limit their choices.