2007-12-11 23:13:41 · 6 answers · asked by Anonymous in Social Science ➔ Economics
Because the game theory Nash equilibrium is for everyone to produce more than their quota (cheat), since each member would be better off cheating for any given choices of the other members.
2007-12-11 23:36:37 · answer #1 · answered by meg 7 · 1⤊ 0⤋
Because self interest of each member over rides the cause of the greater good. So a noble quest, to create a closed doors assembly of influential power brokers, closed to deter the bribing or self motivated from corrupting the ideals and intentions of theh said members, is invariably waylaid by that eventuality. Also based on the premise that man can not serve two masters, the industry, the cartel or the shareholders, without compromising the rights of the other. The suiccess of the said cartels would also be dependant upon the individual aptitude of each member. etc etc...
2007-12-12 09:43:21 · answer #2 · answered by VAndors Excelsior™ (Jeeti Johal Bhuller)™ 7 · 0⤊ 0⤋
Microeconomy has demonstrated by mathematician methods the vulnerability of cartels but I think there is not enough evident about it...
Many cartels did disappears due to new legislation and controls, so government did..
Now OPEC has not total control of oil market but it is accepted if it disappears the oil price get low...
I think the models which try to explain the cartels phenomena are true if only if the cartels does not have control mechanism...remember the OPEC members know these models...
I would focus the point on this sense:
The members of a cartel has two objectives: short run objectives and long run objectives.
Short run objective: Money that they can obtain by the cartel and colluding in the short run
Long run objective: Money that they can obtain by the cartel and colluding in the long run.
If we suppose to collude increase the risk of cartel disappear...then
.- A member with short run priorities more urgent than long run priorities will collude
.- A member with short run priorities less urgent than long run priorities won´t collude.
This means a cartel will be unstable when more than one of its member has urgency in short run priorities than long run priorities...if not...the cartel will be stable...This explanation does not take in account the government and suggest the possibility of "I collude and no one know it", in this case the cartel is stable...
2007-12-12 08:07:39 · answer #3 · answered by CSI - Economics 4 · 0⤊ 0⤋
for individual motives.
cartels work best of each company has the same objectives and if the implementors of the cartel does not change. during the life of any organization, the direction would change and the folks behind the initial cartel structure can change.
once one company wants to get paid more or forced to produce more against the cartels original direction, then the cartel breaks, soon others follow.
are there cartels now?
2007-12-12 07:19:16 · answer #4 · answered by looking 4 a summer job 5 · 1⤊ 0⤋
This is because the cartel is an artificial construction, and the individual members can change the terms of their participation, and their requiremnts of the cartel.
This may bring about disagreements which could lead to the termination of the cartel, or persuade other participants to alter their pricing policy.
2007-12-12 07:32:26 · answer #5 · answered by Rolf 6 · 0⤊ 0⤋
because they are totally against something that is not like their system.and will argue agaist it always,oh,and they are jealous.
2007-12-12 07:18:13 · answer #6 · answered by mr. y 5 · 0⤊ 0⤋