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Cartel

An agreement between two or more firms in the same industry to fix prices at a high level or to restrict output in an effort to increase profits by reducing competition. Members of cartels face a strong incentive to break the agreement by lowering prices in order to undercut other members, thereby gaining all the profit. They are also threatened by new entrants into the market who could undercut the prices of the cartel. Consequently, it is rare to find a stable cartel in a free-market system economy.

The Truth About Monopolies and Anti-Trust Laws

 

 

Mark Hendrickson - Monopoly and Anti-Trust

 

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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