Why do the characteristics of oligopolistic markets create incentives for collusive behaviour? What do recent cases of collusion investigated by the competition authorities in the UK, EU or USA tells us about the benefits the companies sought to gain from colluding and the potential costs of participating in this type of behaviour?
These are some guidelines about the issues to address when writing your essay:
• Explain the key characteristics of an oligopolistic market structure
• Demonstrate why these characteristics provide strong incentives for collusive behaviour by the firms in this type of market structure
• Provide at least two examples of collusive behaviour from different industries
• For each example: identify the potential benefits to the firms involved of taking part in the collusive agreement, and assess the potential costs to the firms of participating in collusive behaviour