Larry DeBrock

"What cartels do is try and keep members from competing," said Larry DeBrock, economist at the University of Illinois.

The NCAA wants to keep member institutions from competing unfairly against each other for recruits, he said.Many of them compete, but under a set of guidelines.If there were no guidelines, the schools could begin an escalation in paying players, much like the professional leagues do.

If they did that, DeBrock said, it would cut into the profit margins of the already financially strapped schools.

...
In theory, the NCAA's primary role is to make and enforce rules for the members of the group, DeBrock said.Because it is a private, nonprofit organization, it can accept or deny membership to schools.If a school breaks the rules, then the NCAA, as a cartel, can tell other teams not to play the rule-breaker.

Because the teams want to win, they sometimes operate outside the rules, he said.

"That's exactly what the NCAA wants to avoid," DeBrock said.

Why do members of a cartel cheat?To become more profitable than their rivals, or in the NCAA's case, to win more games, which leads to bringing in more money.Universities are compensated by performance, whether it be for a bowl game, or success in the NCAA basketball tournament.

...
Every year it adds regulations, DeBrock said.

In some cartels, the membership agrees to manipulate the market.A member, or in this case, a school, who violates the agreement will have the advantage over the other members who have adhered to the agreement, DeBrock said.

Larry DeBrock

Professor Charles M. Linke, Emeritus Professor of Finance, and Professor Larry DeBrock, Professor of Economics, University of Illinois, Urbana-Champaign