The paper seems to be based on an invalid assumption. From the abstract:

> If P != NP, the collusion detection problem is computationally infeasible for markets satisfying a natural instance-hardness condition on their demand structure, rendering punishment threats non-credible and collusion unstable.

...and then from the paper:

> Stigler (1964) famously argued that the “chief difficulty” of collusion is detecting “secret price-cutting.”

The thing is that Stigler's insight is far from proven, and indeed, the primary difficulty in collusion is often not the detection of defection. Firms know they're being undercut all the time. The problem is that very often, there is nothing they can do about it. Markets are specifically structured as firm-to-firm transactions, where competing firms have no leverage over what your firm can do or what sort of transactions you can conduct, and as long as this condition holds it doesn't matter if you know that a competitor is fucking you over, you can't do anything about it.

I'd argue that the increase in collusion and anticompetitive behavior lately is because these conditions increasingly don't hold. When you intersperse another party in the transaction, eg. a regulatory agency, permitting body, or exclusive distribution deal, you introduce a leverage point for incumbents to punish competitors who choose to undercut them.

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jt2190 35 minutes ago | parent [-]

Why can’t my firm react if we find out we’re being undercut by a competitor? Or are you saying that we “know” only in a theoretical, “we can’t prove we’re not being undercut” sort of way, but without “proof” we can’t take action?

	▲	nostrademons a minute ago \| parent [-]
		You absolutely can react, but in general, in a functioning competitive market, you can not alter your competitors' actions. Examples of the former: cutting prices yourself; increasing product quality; differentiating yourself; spending more on advertising to get the word out about your product. Examples of the latter: crafting exclusive deals with your distributors to prevent your competitors from getting shelf space; politically influencing regulatory bodies to declare your competitors' existence illegal; making direct agreements with the leadership of opposing firms to not drop prices or hike wages; assassinating, extorting, or kidnapping rival business leaders. Basically it comes down to "control yourself, because you cannot control others". In a functioning market, you have no control over what rival firms. Your only legal reaction to competition is to improve your own offering until it is the best it can be. In pathological markets where the assumption is (as in the paper) that you can punish rivals for not colluding, you actively make your competitor's offering worse.