Price rigidity the important feature of oligopoly market. Here, price rigidity implies that prices are difficult to change. If any firm increases the price of its product to earn more profit, the other firms may not follow the same. As other firms do not follow, the firm which has increased the price loses its customers. On the other hand, if a firm reduces its price, the rival firms also reduce their price. This leads to price war and consequently, there will be increase in market demand and the firms do not get expected level of profit. So, the oligopolists not change their prices due to the fear of rivals reaction.Reasons for Price Rigidity (Price Stability) 

There are many reasons for price rigidity in oligopoly market, they are as follows:

• Individual sellers in oligopoly market know that there may be price war. 
• The firms want to avoid any involvement in unnecessary insecurity and uncertainity. 
• The firms may stick to the present price level to prevent new firms from entering the 
• The firms may prefer non-price competition rather than price war. 
• It is the kinked demand curve analysis which is responsible for price rigidity in oligopolistic markets.

It is also seen that, if a stable price has been set through agreement or collusion, no seller would like to disturb it, for fear of unleashing a price war and thus engulfing himself into an era of uncertainty and insecurity.