Rivalry and Collusion

Abstract

In economics, rivalry is the process by which firms compete to gain customers. Rivalry can be expressed through changes to the price and non-price (e.g., features and non-price terms of sale) characteristics of a good or service or through competition to produce an innovation (e.g., to add new features to an existing product or to develop new products). Collusion indicates the reduction or elimination of rivalry, as firms act collectively to suppress competition through coordination of prices, features and/or direct manipulation of the market (e.g., by deciding which firms will supply specific customers). With few exceptions, explicit collusion among rivals is treated as a violation of antitrust laws.

This entry was originally published on Palgrave Connect under ISBN 978-1-137-49190-9. The content has not been changed.