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Oligopoly
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Economics
Concept Version 9
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The Prisoner's Dilemma and Oligopoly

Prisoner's Dilmma

Prisoner's Dilmma

Betrayal in the dominant strategy for both players, as it provides for a better individual outcome regardless of what the other player does. However, the resulting outcome is not Pareto-optimal. Both players would clearly have been better off if they had cooperated.

Source

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    https://commons.wikimedia.org/w/index.php?title=File:Prisoner's_Dilemma.jpg&oldid=109261600 Wikimedia CC BY-SA.

Related Terms

  • Pareto optimal
  • Nash equilibrium
  • Strategic dominance
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