Oligopolistic collusion is pervasive, not rare, in all industrialized economies

Evidence

Although firms belonging to oligopolies compete with one another at times, collusion is by no means rare. Cartels protect themselves through price cutting, extensive advertising, control over distribution channels, and the imposition of binding legal, financial, and technological standards. Firms regularly join forces in order to share markets, acquire a monopoly over customers or resources, keep prices high and quality low, secure restrictive access to public contracts, or steer government action in such a way as to manipulate consumer choices. Collusion often involves the corruption of either civil servants, politicians, or both. — Diego Gambetta, The Sicilian Mafia The Business of…, 511

Categorization

• XREF: Establishes baseline that private firms naturally collude without any mafia — sets up the puzzle Gambetta solves: what do mafiosi offer that ordinary cartels lack? Connects to reader’s Milgrom private-judges framework.