Cartels such as OPEC are difficult to maintain because cheating is a dominant strategy for all firms involved.

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Cartels involve a cooperation agreement between firms to restrict output and raise prices. However, each firm has an incentive to cheat by increasing its production and gaining a larger share of the market. If one firm cheats, others are likely to follow, and the cartel falls apart. Therefore, cheating is a dominant strategy for all firms, making it difficult to maintain cartels such as OPEC.

Cartels Such as OPEC Are Difficult to Maintain Because Cheating