Cartel model based on a typical industry: a clipping of the economy of the 70s

Abstract

Cartels are forms of preservation used by firms given a large amount of imperfect information and uncertainty established over various market maneuvers by entrants or established firms. The most common are price fixing and defining the degree of supply of essential or technological products.  In order to control market uncertainties, and to obtain collusive profits (formed by meeting with firms that define the demand for goods), a situation known as cartel firms is predicted.  A challenge, however, is posed for business cartels, which is how to organize collective activities without the use of legislative, or institutional control, such as binding legal contracts or arbitration through regulatory agencies. Although a lack of legal control can be expected to lead to mutual conflicts and opportunistic behavior, the cartel is formed as the only short-lived alternative for companies to survive, in a situation of crisis, pandemic or conflicts of interest with respect to the social establishment. In this study, it is observed the predominance of the organization in cartels in the 70s, given the emergence of the crises posed by the international oil control agencies, OPEC, and by the emergence of the Brazilian industrialization influenced by the economic miracle and developmentalist policy of the governments of that time. As methodology, the bibliographical and exploratory method was used, using the time frame of the 1970s.