[bdcravens]

Of course, but that's the thing about "informal" agreements: presumably there's no record of it. Price collusion happens way more than most realize. I was at a trade show for my employer when a competitor walked up to our booth and out loud proposed that we should all fix our prices. We didn't of course, but the brazenness of saying something like that out in the open like was what surprised me.

[axus]

I thought that only happened in hilarious corporate training videos

[nearlyepic]

Read the DoJ’s case they recently closed on price fixing in the egg market. Apparently those videos are like that because that’s how it goes down in real life. You would think people would be smarter but maybe we only see the stupid ones that get caught.

[stavros]

The good thing about price collusion is that it's hard to coordinate. If even one competitor defects (and they have every advantage to, as they'll win big), then the cartel falls apart.

[eek2121]

One of the big rules of commerce is that competing on price is generally a no-no for large markets. Usually, the powers that be would rather compete on a perceived value; that is how “informal price collusion” works.

Price/cost is the last thing you compete on unless you have a wholesale advantage, which nobody in this particular industry does (visa/mastercard set core rates)

Source: I’ve worked with higher ups in numerous commerce operations.

Commerce is actually even worse than many realize. Look up pepsi and walmart as a small example.

[PunchyHamster]

That assumes that

* it instantly brings them a ton of consumers * they have capacity to serve those customers

if they don't competitor can just keep higher price (especially if it is just small middleman fee most people might not care that much about)

And even if both of those are true worst possible case is them expanding to handle influx of customers and then competition following in few months, making their investment moot

[paytonjjones]

That's true, but the thing about price fixing is that it basically guarantees these conditions.

The price is artificially high -> there's a ton of demand waiting to be unlocked by the "potential energy" gated behind the unnatural price

Capacity is easy to plan around; get too much and you can just raise the price again.

[Terr_]

I'd like to point out that the the idea rests on an inefficient market, where price/transaction information was kept secret long enough to turn the trust-violation into worthwhile profit.

In contrast, an efficient market with perfect price information means other cartel members would instantly notice and change their prices to punish the defector.

[tough]

sounds like an org prisonner's dilemma

[stavros]

Exactly.