Assume you are a business person with an opportunity to make more money by meeti

Question

Assume you are a business person with an opportunity to make more money by meeting with competitors and fixing prices, conduct which is illegal. The authorities will not discover that the prices have been fixed. In fact, the price rise could be small-pennies per item-but the increases in net profit could be considerable.

Is this price-fixing fair? Ethical? Socially responsible?
Does it make any difference what the extra profit is used for such as charity, employee raises, or expansion?
Would your answer be different if there was an even chance that you would be caught?
Why/Why not?

Explanation / Answer

In this case, this is not fair, ethical, or socially responsible. In addition, think of this referring to Game Theory. There will always be an incentive for one firm to cheat meaning after they both raise prices, one firm slightly lowers their price resulting in a larger profit. This in turns normally goes on back and forth until equilibrium is met. In our case, it does not make a difference what the money is going to, it is still unfair to consumers and deceives them. If there was a chance of being caught, this would not change my answer only reinforce the strictness involved in saying NO we cannot nor will not fix prices due to ethical and legal ramification. Hope this helps

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