In December 2020, following an investigation by the Competition and Markets Authority (CMA), 2 UK-based companies who
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Question:
In December 2020, following an investigation by the Competition and Markets Authority (CMA), 2 UK-based companies who supply groundworksproducts to some of the nation's largest construction firms, have been fined15m for colluding illegally to reduce competition and maintain or increase prices for over 2 years. This involved sharing confidential information on future pricing and commercial strategy andmonitoring each other's prices.
a) Useeconomic theory to explain how firms can sustain collusion in the market when they interact repeatedly. When does economic theory suggest that collusion is more likely to be successful? How does information sharing and monitoring help sustain the collusion in the above case?
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