This is because these four companies that are dominating the market have enough power and resources not to let new companies to steal their piece of the pie. They are competing among each other and there are huge amounts of money involved in this “fight“. Also it is very hard to exit the market for a company because exit of the company from this market can actually make lots of economic problems for economy in the country where company is situated. There are even other barriers for new companies to enter the market and one of them is legal barrier. This means that government will not grant permissions for new company to enter the market due to safety or other reasons (Water, oil gas companies).
Sometimes these companies that are the oligopoly collude in a cartel, that is a secret (against the law in most countries) cooperation with each other so they can control the market and keep prices high. When cartel is in action producing results are similar that to a monopoly, sometimes they are anti-competitive only by default, because they fear that direct competition would damage all of them. Their actions, therefore, try to take account of the reaction of other oligopolists; this usually happens when cartel is secret. Since it is uncertain, how will each company behave, whether they will cheat on cartel to make bigger profit or they will not, the behavior of an oligopoly is hard to predict. If companies realize that cartel is not working and other companies are breaking the rules of the cartel and cheat a price war breaks out. Oligopolists will produce and price much as a perfectly competitive industry would; at other times they act very like a monopoly.
Homogeneous, or pure, oligopoly involves rivalry among a few producers of products, which are identical with one another. Differentiated oligopoly involves rivalry among a few producers of products, which are similar (in the eyes of the purchasers) but not identical. Monopolist competition is another kind of market which also comprises rivalry among producers of differentiated products, but the market contains a large number of producers rather than just a few.
Oligopoly is considered a common market condition. A localized example of interdependence among a few is the location of three petrol stations on three corners of a rural intersection. If one lowers the price per gallon the others will follow or lose most of their business. Examples in national markets include the automobile industry, the tyre industry, the steel industry and the beer industry.