Abstract

Although, according to the Austrian school, economic competition, since it pushes entrepreneurs to innovations that benefit not only themselves but consumers as well, is supposed to lead to the public good, it is essential to consider also the possibility of cartel formation. In this case a mechanism is set up whereby the prices of goods and services are kept artificially high. The article shows that it is the same entrepreneurial spirit celebrated by the Austrian school that makes that in certain situations, whose logic can be analyzed according to the model of the prisoner’s dilemma, companies agree to keep prices high. The conclusion is that the public good can only be realized through institutional interventions with both legal and ethical dimensions.