Abstract: Cartel versus Monopoly: The German Nitrogen Industry in the Interwar Years
During the interwar years, the German nitrogen cartel included several small producers of agricultural fertilizers and a very large firm, BASF, later IG Farben. The cartel lasted from 1919 until the end of World War II. The proposed paper aims to show two facts that seem to contradict each other: that BASF was a potential monopolist, and that the cartel in which it agreed to stay set prices that were considerably lower than the monopoly price. This poses the question of why this firm stayed in the cartel, instead of establishing a true monopoly.