One of the surprising conclusions of many of the noncooperative models of oligopoly is that firms end up better off with the noncooperative outcome than they would by cooperating with one another.

Question

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Noncooperative models of oligopoly often conclude that while firms could achieve higher profits through cooperation (e.g., by forming a cartel and acting like a monopolist), the noncooperative equilibrium (e.g., Cournot or Bertrand competition) typically results in lower profits for the firms compared to what they could achieve through cooperation. This is because, in the noncooperative setting, firms have an incentive to undercut each other to gain market share, leading to outcomes where prices and profits are lower than in the cooperative scenario.

One of the Surprising Conclusions of Many of the Noncooperative