Halfway between pure and perfect competition and monopoly, the oligopolistic structure is a market situation with a small number of firms that constitute the majority of the supply and none of which can prevent the others from exercising significant influence. A monopoly is a market dominated by one firm, a duopoly by two firms and an oligopoly by several firms. The number of firms is not limited but must be sufficiently concentrated that the actions of one firm have a significant influence on the others.
It is part of the structures that constitute models of imperfect competition because market powers are exercised over demand. Moreover, these companies can find agreements to restrict production and profit above the law of supply and demand. This is typically the case in certain industries such as oil (with organizations such as OPEC and OPEC+) or diamonds (where De Beers regulates production).
The existence of an oligopoly may be the result of a government's desire to ensure the proper functioning of the market, of regulation or of natural barriers to entry such as heavy initial investments. In most cases, it is not in the interest of firms to be numerous in a market. Instead, they must try to capture a large market share and make demand inelastic. This results in market stability and visibility for both companies and investors. The second advantage of an oligopolistic situation is on the side of the players who crush the market. They can set their prices. The profit margins of these companies are generally well above the market average.
This thematic list aims to identify companies that benefit from oligopolistic market structures. This allows investors to take advantage of generally more profitable companies with more stable revenues over time.