When several companies, whether formal or informal, collude to determine market parameters such as quantities supplied, prices, or distribution methods, it is called a cartel. This practice is generally prohibited in most developed countries because it leads to reduced competition. According to Philip Parker, for these agreements to function effectively, companies must exchange information. Without communication, the cartel loses its cohesion. Conversely, when communication channels are open and market participants share a common understanding of the constraints surrounding them, they can coordinate their actions effectively.