question archive Describe several barriers (beyond antitrust laws) to collusion among oligopolists

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

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

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Apart from antitrust law barriers, there are several barriers that oligopolist faces during collusion, and some of them are as follows:

1. Cheating - There is always a fear that colluding members might cheat on each other to gain a higher profit.

2. Rise in the number of firms - When the number of firms in the oligopoly market rises then there is a lack of coordination among firms as more firms are forming cartels.

3. Restricted new entry- when there is existing collusion between different firms then it automatically removes the new entry of the organizations.

4. Differential cost - Different firms may face different costs due to differences in the internal factors; therefore, one price for all can be advantageous for one, but may not be for others which may lead to a cartel failure.