Question

Describe several barriers (beyond antitrust laws) to collusion among oligopolists. Tere.]

Answer 1

Oligopolists face different cost and production functions which is why they cannot agree on prices most often.

More number of firms in the industry also reduces the chances of collaboration and collusion on agreement.

Cheating creates room for one firm to gain an advantage over the others, and it leads to discrimination and lack of collusion.

Entry of new players generates a certain threat in the collusive power of companies.