0 sats \ 6 replies \ @TNStacker 19 Aug \ parent \ on: Grocery Store Price Gouging? econ
Are four producers few enough for a cartel?
Not sure the number matters that much.
At least based on Wikipedia's blerb on it. And this aligns with what I think of with a cartel.
A cartel is a group of independent market participants who collude with each other as well as agreeing not to compete with each other in order to improve their profits and dominate the market. A cartel is an organization formed by producers to limit competition and increase prices by creating artificial shortages through low production quotas, stockpiling, and marketing quotas.
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my point is less competition leads to collaboration, whether or not a formal cartel is formed. A natural, informal organization forms due to game theory.
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I've done some work on related topics. While it's certainly true that concentration is increasing throughout the ag sector, the general view seems to be that there is not much evidence to support monopoly pricing.
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How would the general view know? In most collusion cases we find out after someone blows a whistle or takes an offer in a case.
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This is from people studying the price trends of outputs compared to those of inputs. If some sort of oligopolistic pricing is happening you'd expect to observe price trends of outputs change as concentration increases.
I'm not vouching for their methods or conclusions. That's just some context that I happen to have access to.
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this is what I'm trying to say, I think.
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