Editing Collusion (section)

==Base model of (price) collusion==
For a cartel to work successfully, it must:

* '''Co-ordinate''' on the conspiracy agreement (bargaining, explicit or implicit communication).
* '''Monitor''' compliance.
* '''Punish''' non-compliance.
* '''Control''' the expansion of non-cartel supply.
* '''Avoid''' inspection by customers and competition authorities.

Regarding stability within the cartel:
* Collusion on high prices means that members have an incentive to deviate.
* In a one-off situation, high prices are not sustainable.
* Requires long-term vision and repeated interactions.
* Companies need to choose between two approaches：
# Insist on collusion agreements (now) and promote cooperation (future).
# Turn away from the alliance (now) and face punishment (future).
* Two factors influence this choice: (1) deviations must be detectable (2) penalties for deviations must have a significant effect.
* Collusion is illegal, contracts between cartels establishing collusion are not protected by law, cannot be enforced by courts, and must have other forms of punishment<ref>Levenstein, & Suslow, V. Y. (2006). What Determines Cartel Success? Journal of Economic Literature, 44(1), 43–95. https://doi.org/10.1257/002205106776162681</ref>