It is now well established in both the economic and legal literature that successful price co-ordination (either express or tacit) is not inevitable — even in highly concentrated industries protected by insurmountable barriers to entry. The key to this insight is the recognition that even though oligopolists’ fates are interdependent, individual self-interests are not perfectly consonant. As a result, oligopolists may find it difficult to agree on a mutually acceptable co-operative outcome, achieve that outcome smoothly, and maintain it over time in the face of exogenous shocks and private incentives to deviate. In the current language of industrial organisation, the joint profit-maximising point may not be a Nash equilibrium. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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