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Even When Allowed to Collude, Firms in an Oligopoly May

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Essay

Even when allowed to collude, firms in an oligopoly may choose to cheat on their agreements with the rest of the cartel. Why?


Definitions:

Business

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.

Senior Executives

High-ranking employees in a business who are responsible for making major corporate decisions, usually part of the company’s top management.

Criminally Prosecuted

The process of being charged with and tried for a criminal offense by legal authorities.

Basic Resources

Essential assets or inputs required for the operation of an organization, including natural resources, human resources, and capital.

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