Market Allocation

Definition: An agreement among competitors to divide customers, territories, or types of business rather than compete for them.

Example

Two unrelated brokerages agree that one will serve only the north side of town and the other only the south side.

Keep the distinction clear

A firm independently choosing its service area is different from a reciprocal agreement among competing firms.

Related terms

Antitrust Laws · Collusion · Price Fixing

Keep studying

Commission Math: Tiered Rates and Broker–Associate Splits

References: U.S. Department of Justice: price fixing and market allocation

Pronunciation (US): MAR-kit al-uh-KAY-shun (capitals show stress)

Pronunciation reference: Merriam-Webster