What are the pros and cons of monopolies?

Encyclopedia of Opinion

Question: What are the pros and cons of monopolies?
Position‹2 of 2: Monopolies are damaging to economies
Argument‹2 of 5›: Oligopolies behave like monopolies

Concentrated oligopolies are just as bad for economic growth as monopolies

The argument

Oligopolies may give the appearance of competition, but generally industries with few players in repetitive games default towards cooperation. Cooperation entails limiting supply and raising prices. Research by the OECD shows that cartels and price fixing is widespread in oligopolies. Most cases involve industries with four major players. Many oligopolies don't even need to fix prices illegally and can "signal" their intentions to competitors. This is widely understood and covered in economic literature.

Premises

[P1]Industries with few players in repeated interactions tend to default toward cooperation rather than genuine competition. [P2] This cooperation, whether through explicit cartels or tacit signaling, results in limited supply and raised prices just as a monopoly would. [P3] OECD research and economic literature confirm that such collusive behavior is widespread in oligopolies, especially those with around four major players. [C] Therefore, oligopolies behave like monopolies and are similarly damaging to economies.

Counter-arguments

Critics reply that the argument shifts from monopolies to oligopolies and then treats them as equivalent, which overstates the case. Oligopolists often do compete — on price, quality, innovation and marketing — and tacit coordination is unstable, since each firm has a strong incentive to undercut the others to win share, which is why cartels frequently break down. Competition authorities detect and penalise illegal price-fixing precisely because it is not the automatic outcome the argument implies. That some oligopolies collude does not show that few-player markets generally behave like monopolies, so the inference from "cartels occur" to "oligopolies are as damaging as monopolies" does not hold across the board.

Rejecting the premises

[Rejecting P1] Repeated interaction can support cooperation, but it also gives each firm an incentive to defect and undercut, so few-player markets often produce real competition rather than default collusion. [Rejecting P2] Explicit cartels and tacit signalling occur, yet they are frequently unstable and are actively detected and punished, so they are not the reliable equilibrium the argument assumes. [Rejecting P3] That OECD studies find collusion in some four-player industries shows it can happen, not that oligopolies in general behave like monopolies.