Uses buffer stock to maintain prices within target range. U.S. not a member. ITA collapsed in 1987. Artificially high prices increased nonmember production. An oil cartel.
Cartels cooperate to act like a monopolist.
Unilateral attempts to regulate commodity prices. OPEC members restrict oil production to raise price. Cheating with the cartel Cartel equilibrium generates incentive to cheat on the cartel. Firms profit by cheating. Cartels tend to break down.