Cartels in Quality-Segmented Markets Impact Consumer Welfare and Market Shares.
Price collusion in segmented markets was studied to see how it affects market shares and welfare. Different types of cartels were analyzed, and it was found that partial cartels lose market share, while industry-wide cartels aim to maintain their market shares. The impact on consumer and social welfare depends on the cost of producing quality, and more collusion can actually benefit society as a whole.