Jamal Awil

← The Sicilian Mafia The Business of…

Anticompetitive outcomes can arise without inter-firm agreement. [causal]

Anticompetitive outcomes can emerge without agreement among firms. A large firm, for instance, may have an interest in excluding new competitors even if rival firms share the advantages but do not share the cost. But whenever restrictive practices require the participation of all firms, an enforcing agency can provide that extra incentive for each member not to play the free rider.

XREF: Connects to collective action and free rider theory; the passage invokes Olson-style logic about why coordination needs an enforcer. DEFINE: Clarifies how the free rider problem applies to restrictive business practices and cartel enforcement.

Diego Gambetta, The Sicilian Mafia The Busi…, loc. 780