Tacit Collusion Law and Legal Definition
Tacit Collusion is seemingly independent, Two firms agree to play a certain strategy without explicitly saying so. Oligopolists usually try not to engage in price cutting, excessive advertising or other forms of competition. Thus, there may be unwritten rules of collusive behavior such as price leadership (tacit collusion). A price leader will then emerge and sets the general industry price, with other firms following suit. Also termed implicit collusion, the distinguishing feature of tacit collusion is the lack of any explicit agreement.