Final answer:
Oligopolists can achieve a cooperative outcome, similar to a monopoly, by repeating their interactions multiple times, which allows them to learn the value of cooperation over competition.
Step-by-step explanation:
Oligopolists may be able to reach their preferred, cooperative outcome in specific conditions. A significant aspect of their success relies on the repetition of the game they are playing. One of the key factors enabling oligopolists to successfully cooperate is playing the game a sufficient number of times, which fosters a level of trust and predictability among the firms. When these firms repeatedly interact with each other, they learn the benefits of cooperation over competition, as they can observe the outcomes of their choices over time and adjust their behavior accordingly. The Prisoner's Dilemma is often used as an example in game theory to illustrate why two completely rational individuals might not cooperate, even if it appears that it is in their best interest to do so. However, if the game is repeated multiple times, cooperative strategies can emerge, and oligopolists might find that aligning with each other to act like a unified monopoly can be more profitable in the long run.