Type of Oligopoly: Non-Collusive

In a collusive oligopoly, a few dominant firms collaborate to influence prices.

However, in a non-collusive oligopoly, firms function independently, each determining its price and output levels, and there is no shared agreement on prices or market strategies.

Non-collusive oligopolies use aggressive pricing strategies, do not engage in price fixing,  compete independently, and encourage firms to differentiate themselves without collaborative agreements. Here, each firm aims to establish its competitive edge in the market.

To dominate and capture more market share, firms innovate, improve product quality, and offer consumers a more comprehensive range of choices.

Also, if the oligopoly firms cannot successfully collude on prices, there is the possibility of lowering the product prices to gain market share. However, this strategy often turns into a price war.

The intense price competition further leads to instability as firms constantly react to their rivals' actions.

An example of a non-collusive oligopoly is the smartphone industry, where major players like Apple and Samsung independently compete for market dominance through product differentiation and technological innovation.