provide innovative products and high-quality service.

The task of public policy with regard to competition is to sort through these multiple realities, attempting to

encourage behavior that is beneficial to the broader society and to discourage behavior that only adds to the

profits of a few large companies, with no corresponding benefit to consumers. Monopoly and Antitrust Policy
discusses the delicate judgments that go into this task.
252 10 • Monopolistic Competition and Oligopoly

BRING IT HOME

The Temptation to Defy the Law
Oligopolistic firms have been called “cats in a bag,” as this chapter mentioned. The French detergent makers chose

to “cozy up” with each other. The result? An uneasy and tenuous relationship. When the Wall Street Journalreported

on the matter, it wrote: “According to a statement a Henkel manager made to the [French anti-trust] commission,

the detergent makers wanted ‘to limit the intensity of the competition between them and clean up the market.’
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