Section 2
Oligopoly in Practice
Book
Version 3
By Boundless
By Boundless
Boundless Economics
Economics
by Boundless
5 concepts
![Thumbnail](../../../../../../figures.boundless-cdn.com/20471/raw/opec.jpg)
Collusion and Competition
Firms in an oligopoly can increase their profits through collusion, but collusive arrangements are inherently unstable.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20487/square/prisoner-27s-dilemma.jpeg)
Game Theory Applications to Oligopoly
Game theory provides a framework for understanding how firms behave in an oligopoly.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20488/square/prisoner-27s-dilemma.jpeg)
The Prisoner's Dilemma and Oligopoly
The prisoner's dilemma shows why two individuals might not cooperate, even if it is collectively in their best interest to do so.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20499/square/economics-bertrand-diag1.jpg)
Duopoly Example
The Cournot model, in which firms compete on output, and the Bertrand model, in which firms compete on price, describe duopoly dynamics.
![Thumbnail](../../../../../../figures.boundless-cdn.com/20508/square/orting-countries-countries.jpg)
Cartel Example
A cartel is a formal collusive arrangement among firms with the goal of increasing profits.