In a payoff matrix representing two competing firms in an oligopoly, what is the most likely outcome if both firms decide to collude?

In an oligopoly, firms often compete in ways that can lead to higher profits if they work together, a situation known as collusion. When both firms decide to collude, they agree to set prices and production levels to maximize their combined profits rather than compete against each other. This means they can avoid price wars, which usually drive profits down. For example, if two firms selling similar products agree to charge the same higher price, they can both earn more money than if they were undercutting each other. However, this agreement can be unstable, as one firm might be tempted to break it for a better profit, leading to potential conflict in the future.