Conclusion

Conclusion.

So far I have discussed the collusion using some simple example with a choice of output levels made by the two firms. But there may be several firms in the industry, and in fact firms have a much broader choice. It may be that their decision variable is price, investment, RD and advertising.

Nevertheless the more or less the same analysis could be applied in each of the case. I have examined different assumptions and predictions, which allow or do not allow the possibility of collusion. In reality such thing as collusion definitely takes place, if it had not, there would not have been any strong an ambiguous discussion of this topic. But I think it would be appropriate to end this essay with an explicit reminder that once we leave the world of perfect competition, we lose the identity of interests between consumers and producers.

So, the discussion of benefits to firms in oligopoly that arise from finding strategies to enforce collusive behaviour might well have been the discussion of the expenses of consumers. 7.