A 2016 study on 14 Dutch cartels that had an average duration of about five years and

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A 2016 study on 14 Dutch cartels that had an average duration of about five years and were fined by the Netherlands Authority for Consumers and Markets between 2007 and 2012 found that these cartels implemented a number of informal internal rules. One was that compensation for violating agreed-upon market shares by over or under \(5 \%\) was not needed. Another was that, where members divided regions and a member from outside a region received an order in violation of the allocation agreement, the receiving member was required to pay \(2 \%\) of the contract amount to the cartelist who "owned" the region (Jaspers, 2017). Explain why cartel members might agree to implement informal coordinating rules like these.

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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