An oligopoly exists when a market has a small number of suppliers, if there are only two suppliers is called duopoly. Therefore, the actions of any company can influence in the others, the companies take into account the actions of their rivals for maximize their profits.
Due to the limited number of suppliers can lead to a high degree of competitiveness, but the providers can partner to obtain greater incentives, setting higher prices, reducing the amount offered, dividing the market segments, etc. It can lead to a situation similar to the monopoly. But there are laws against such policies but also depends on the companies to follow these agreements. Therefore it could be described as an imperfectly competitive market.
Analyzing the situation of oligopoly we can define the following characteristics:
The most of the sales are made by a few companies, which can influence the selling price.
There may be a leader in prices and others are forced to follow him.
The decisions can be taken independently or through collaboration.
It is in an intermediate position between perfect competition and monopoly.
Because of the small number of companies and they handle the most of the market, it is really hard to market access for other companies.
There are two types of products: homogeneous (steel) and differentiated (automobiles).
The presence of marketing and advertising is considerable.
It is often abused the use of dumping, which consist in the lower prices even below of production cost.
Game Theory 博弈论
Now, we have the choice between cooperation and competition. Because if the companies work together they could produce a situation of monopoly but if they decide to compete they could approach a situation of perfect competition. While with the collaboration will be benefit for both companies, it is not always like as each of them individually could improve their situation in breach of the agreement.(责任编辑：BUG)