Conscious parallelism

Conscious parallelism
Scale of justice 2.svg
Competition law
Basic concepts
Anti-competitive practices
Enforcement authorities and organizations
This box: view · talk · edit

Conscious parallelism is a term used in competition law to describe price-fixing between competitors in an oligopoly that occurs without an actual spoken agreement between the parties. Instead, one competitor will take the lead in raising prices. The others will then follow suit, raising their prices by the same amount, with the unspoken mutual understanding that all will reap greater profits from the higher prices so long as none attempts to undercut the others.

This practice, like most anticompetitive practices, can be harmful to consumers who, if the market power of the firm is used, can be forced to pay monopoly prices for goods that should be selling for only a little more than the cost of production. Nevertheless, it is very hard to prosecute because it occurs without producing any evidence of collusion between the competitors.

The term has also been used to describe industrywide assumption of terms other than price. For example, all competitors in an industry might make only long-term leases of products such as heavy machinery, leaving lessors with no opportunity to make a short-term lease of that product from any competitor.

See also


Wikimedia Foundation. 2010.

Игры ⚽ Нужно решить контрольную?

Look at other dictionaries:

  • conscious parallelism — Price fixing between competitors that occurs without an actual agreement between the parties. For instance, one company raises its price for a service and other competitors do the same. Can also be used to describe imitative activity over terms… …   Law dictionary

  • conscious parallelism — noun In United States antitrust law, price fixing that occurs without direct communication between the participants, but where the participants instead intentionally follow one another in raising prices to maximize profits at the expense of… …   Wiktionary

  • conscious parallelism —    A coincidental (i.e., not prearranged or discussed) imitation by a business of a competitor s action, such as moving prices up or down or making similar special offers. This must be done without active conspiracy between the business rivals,… …   Business law dictionary

  • Parallelism — may refer to:* Angle of parallelism, the angle at one vertex of a right hyperbolic triangle that has two hyperparallel sides * Conscious parallelism, price fixing between competitors in an oligopoly that occurs without an actual spoken agreement… …   Wikipedia

  • parallelism — 1. The state of being structurally parallel. 2. In psychology, the mind body doctrine that for every conscious process there is a corresponding or parallel organic process, without asserting a causal interrelation between the two. [para + G.… …   Medical dictionary

  • Psycho-Physical Parallelism —     Psycho Physical Parallelism     † Catholic Encyclopedia ► Psycho Physical Parallelism     A doctrine which states that the relation between mental processes, on the one hand, and physical, physiological, or cerebral processes on the other, is …   Catholic encyclopedia

  • Psychophysical parallelism — Psychophysical parallelism, in psychology, is the theory that the conscious and nervous processes vary concomitantly whether or not there be any causal connection between them; [web cite|url=http://www.newadvent.org/cathen/11474a.htm|title=Psycho …   Wikipedia

  • Collusion — For other uses, see Collusion (disambiguation). Competition law Basic concepts History of competition law Monopoly Coer …   Wikipedia

  • Monopoly — This article is about the economic term. For the board game, see Monopoly (game). For other uses, see Monopoly (disambiguation). Competition law Basic concepts …   Wikipedia

  • Natural monopoly — A monopoly describes a situation where all (or most) sales in a market are undertaken by a single firm. A natural monopoly by contrast is a condition on the cost technology of an industry whereby it is most efficient (involving the lowest long… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”