Wednesday, August 13, 2008

Oligopsony cartel breaks down

Cartels are inherently unstable, regardless of whether they are selling (oligopolies) or buying (oligopsonies) because individual incentives differ from those of the group. The city or Irving has cut an indepedent deal with a supplier, much to the chagrin of the "Regional Water District planning director," which seems like bureaucratese for "cartel manager":

"It makes for bad policy, and it is a real blow to regional coordination and cooperation, which historically this region has found a way to do great things."

Thanks to Michael Ward.

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