Editing Cartel (section)

== Effects ==
A survey of hundreds of published economic studies and legal decisions of antitrust authorities found that the median price increase achieved by cartels in the last 200 years is about 23 percent.<ref>{{Cite journal|last1=Levenstein|first1=Margaret C.|last2=Suslow|first2=Valerie Y.|date=2006|title=What Determines Cartel Success?|url=https://www.jstor.org/stable/30032296|journal=Journal of Economic Literature|volume=44|issue=1|pages=43–95|doi=10.1257/002205106776162681|jstor=30032296|hdl=2027.42/35837|issn=0022-0515|hdl-access=free}}</ref> Private international cartels (those with participants from two or more nations) had an average price increase of 28 percent, whereas domestic cartels averaged 18 percent. Less than 10 percent of all cartels in the sample failed to raise market prices.<ref>John M. Connor. Cartel Overcharges, p.&nbsp;249–387 of The Law and Economics of Class Actions, in Vol. 29 of Research in Law and Economics, edited by James Langenfeld (March&nbsp;2014). Bingley, UK: Emerald House Publishing&nbsp;Ltd. June&nbsp;2017</ref>

In general, cartel agreements are economically unstable in that there is an [[incentive]] for members to cheat by selling at below the cartel's agreed price or selling more than the cartel's production quotas. Many cartels that attempt to set product prices are unsuccessful in the long term because of cheating punishment mechanisms such as price wars or financial punishment.<ref>{{Cite journal|last1=Levenstein|first1=Margaret C.|last2=Suslow|first2=Valerie Y.|date=2006|title=What determined cartel success?|journal=Journal of Economic Literature|volume=44|pages=43–95|doi=10.1257/002205106776162681|hdl=2027.42/35837|via=American Economic Association|hdl-access=free}}</ref> An empirical study of 20th-century cartels determined that the mean duration of discovered cartels is from 5 to 8 years and overcharged by approximately 32%. This distribution was found to be bimodal, with many cartels breaking up quickly (less than a year), many others lasting between five and ten years, and still some that lasted decades.<ref>[[Margaret Levenstein|Levenstein, Margaret C.]] and Valerie Y. Suslow. "What Determines Cartel Success?" Journal of Economic Literature 64 (March&nbsp;2006): 43–95</ref> Within the industries that have operating cartels, the median number of cartel members is 8. Once a cartel is broken, the incentives to form a new cartel return, and the cartel may be re-formed. Publicly known cartels that do not follow this [[business cycle]] include, by some accounts, OPEC.

Cartels often practice price fixing internationally. When the agreement to control prices is sanctioned by a multilateral treaty or protected by national sovereignty, no antitrust actions may be initiated.<ref>Connor, John M. ''Private International Cartels: A Concise Introduction: SSRN Working Paper.'' (November 12, 2014). [http://ssrn.com/abstract=2523883 Abstract].</ref> OPEC countries partially control the [[price of oil]].<ref>{{Cite web |last=Burclaff |first=Natalie |title=Research Guides: Oil and Gas Industry: A Research Guide: Organizations and Cartels |url=https://guides.loc.gov/oil-and-gas-industry/organizations |access-date=2023-03-17 |website=guides.loc.gov |language=en}}</ref><ref>{{Cite journal |last1=Huppmann |first1=Daniel |last2=Holz |first2=Franziska |date=2015 |title=What about the OPEC Cartel? |url=https://www.econstor.eu/handle/10419/111843 |website=EconStor}}</ref>