Strategic alliances can help create the social setting within which tacit collusion may develop.

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Strategic alliances involve two or more companies working together towards a common goal. Through such collaborations, the companies may share knowledge, resources, and expertise, which may lead to a greater understanding of each other's business practices and potentially pave the way for tacit collusion. Tacit collusion occurs when firms coordinate their pricing and output decisions without explicit agreement, which can be facilitated by a social setting where companies are more familiar with one another. Therefore, strategic alliances can create the conditions for tacit collusion to develop.

Strategic Alliances Can Help Create the Social Setting Within Which