BROWSE

Oligopoly

Definition

An oligopoly is a market form wherein a market or industry is dominated by a small number of large sellers. Oligopolies can result from various forms of collusion which reduce competition and lead to higher prices for consumers. Oligopoly has its own market structure.

What is an 'Oligopoly'

Oligopoly is a market structure in which a small number of firms has the large majority of market share. An oligopoly is similar to a monopoly, except that rather than one firm, two or more firms dominate the market. There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly impact and influence the others.

Explaining 'Oligopoly'

An example of an oligopoly is the wireless service industry in Canada, in which three companies – Rogers Communications Inc (RCI), BCE Inc (BCE) subsidiary Bell and Telus Corp (TU) – control approximately 90% of the market. Canadians are conscious of this oligopolistic market structure and often lump the three together as "Robelus," as though they were indistinguishable. In fact, they are often indistinguishable in price: in early 2014 all three companies raised the price for smartphone plans to $80 in most markets, more or less in tandem.


Further Reading


Oligopoly and financial structure: The limited liability effect
www.jstor.org [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Oligopoly and financial structure: CommentOligopoly and financial structure: Comment
www.jstor.org [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Bankruptcy costs and the theory of oligopolyBankruptcy costs and the theory of oligopoly
www.jstor.org [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Optimum welfare and maximum revenue tariffs under oligopolyOptimum welfare and maximum revenue tariffs under oligopoly
ideas.repec.org [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Financial structure and tacit collusion with repeated oligopoly competitionFinancial structure and tacit collusion with repeated oligopoly competition
www.sciencedirect.com [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Oligopoly, financial structure, and resolution of uncertaintyOligopoly, financial structure, and resolution of uncertainty
onlinelibrary.wiley.com [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Theories of oligopoly behaviorTheories of oligopoly behavior
www.sciencedirect.com [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

Irreversible investment, financing, and bankruptcy decisions in an oligopolyIrreversible investment, financing, and bankruptcy decisions in an oligopoly
www.jstor.org [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …

CAPITAL STRUCTURE IN A STOCHASTIC OLIGOPOLY.CAPITAL STRUCTURE IN A STOCHASTIC OLIGOPOLY.
elibrary.ru [PDF]
We argue that product markets and financial markets have important linkages. Assuming on oligopoly in which financial and output decisions follow in sequence, we show that limited liability may commit a leveraged firm to a more aggressive output stance. Because firms will …



Q&A About Oligopoly


What do Canadians call this group?

Canadians often lump these three companies together as "Robelus," as though they were indistinguishable. In fact, they are often indistinguishable in price; all three companies raised prices for smartphone plans to 8 per month, more or less at once.

How many firms are there in an oligopoly?

There is no precise upper limit to the number of firms in an oligopoly, but the number must be low enough that the actions of one firm significantly impact and influence the others.

What is an oligopoly?

An oligopoly is a market structure in which a small number of firms has the large majority of market share.

Who controls 9 out of 10 wireless service markets in Canada?

Rogers Communications Inc (RCI), BCE Inc (BCE) subsidiary Bell and Telus Corp (TU) control approximately 9 out of 10 wireless service markets in Canada.

What does "oligopolistic" mean?

Oligopolistic means pertaining to or characteristic of an oligopoly.

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