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What determines cartel success?
…a wide variety of variables! Source: Margaret C. Levenstein, Valerie Y. Suslow: Breaking Up Is Hard to Do: Determinants of Cartel Duration
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structural variables external factors organizational factors
- variance in and concentration of demand, - the structure and homogeneity of costs, - the rate of technological change Etc. organizational factors - distribution of power within the cartel, its voting structure, the sophistication of mechanisms for detecting and deterring cheating, the ability of the cartel itself to create barriers to entry etc external factors - government regulation -anti-trust enforcement
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idiosyncratic and history-dependent determinants
- how quickly the organization learns about cartel design, the start-up costs of creating the cartel the reputation of cartel members Etc.
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