Firms that engage in Cournot cheating will achieve higher levels of performance than will firms that engage in Bertrand cheating. Why, then, would firms ever engage in Bertrand cheating? Both cost...

Firms that engage in Cournot cheating will achieve higher levels of performance than will firms that engage in Bertrand cheating. Why, then, would firms ever engage in Bertrand cheating?

Both cost homogeneity and product homogeneity enhance the ability of firms in an industry to implement tacit collusion strategies. Under what conditions, if any, would a firm be able to pursue a cost leadership strategy or a product differentiation strategy while simultaneously trying to implement a tacit collusion strategy? Are these strategies mutually exclusive?