There is a constant tension in an oligopoly between cooperation and self-interest because after an agreement to reduce production is reached, it is profitable for each individual firm to cheat and produce more.

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This is because reducing production can lead to higher prices and profits for all firms, but if one firm produces more, they can capture a larger market share and potentially higher profits at the expense of the other firms. This can create a prisoner's dilemma situation where each firm is better off cheating, even though cooperation would lead to the most favorable outcome for all firms.

There Is a Constant Tension in an Oligopoly Between Cooperation