Why Are Cartels Inherently Compatible?

First and foremost, all cartels are inherently unstable because it is difficult for them to follow the four requirements for them to be successful which are Share, Substitutes, Stability, and Solidarity according to Chapter 17 Contracts, Combinations, and Conspiracies. Share, emphasizes on how cartels must have a large control on whatever they are specializing in. Substitutes, on the other hand talk about cartels having few and inelastic substitutes in order for their services to bring in high profits. As for Stability, outside forces with the economy should not affect the cost or demand of the cartels services. Last is Solidarity, which is cartels being internally strong by people in the cartels not cheating to raise profits for themselves against the benefit of the group or the cartel will break down. In fact, The American Economic Review also speak on how cartels are unstable because of the issue of sharing and deterring problems. For the reason that some members will disagree about the appropriate profit coming in, which leads them into thinking about cheating. In addition, the ones who do not think of cheating because of disagreeing issue will eventually cheat because of the positive marginal profits. Furthermore,
Leslie (2008) states the following:

Even firms that entered into the cartel agreement sincerely may feel compelled to compete if they perceive that others are cheating. Some commentators have suggested that this incentive to cheat diminishes the need to focus significant attention or resources on anti-cartel efforts, since the conspiracies will inevitably unravel of their own