Cartels: a Good or a Bad Strategy?

Pop, Izabela Luiza (2015): Cartels: a Good or a Bad Strategy? Published in: Economy-Innovation-Communication-University, 7th International Symposium Workshop – A cross cultural model , Vol. 6, No. 9 (June 2015): pp. 29-38.

Abstract

Any organization should seek the efficiency maximization, namely the achievement of an effect/effort ratio as high as possible. In order to apply this economic ground rule, some companies use strategies based on gaining a competitive advantage over competitors. In contrast, other companies choose lighter options to increase profitability. They apply strategies focused on agreements with competitors that aim to maintain prices at a certain level regardless of economic factors governing the market mechanism. The purpose of this paper is to highlight the positive and negative effects of cartels as a management strategy. In this regard, the first part of the article summarizes the most important theories about cartels and their characteristics, while the second part presents some European and Romanian cartels, based on data provided by the European Commission and the Competition Council. The final part presents the most important findings and conclusions but also some recommendations for future research.

• Item Type: MPRA Paper
• Language: English
• Keywords: cartels, competition, strategies, development, price
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L12 - Monopoly ; Monopolization Strategies; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M10 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics > M21 - Business Economics

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