In this game, maintaining price represents co-operating, while offering a
discount represents defecting. As with the original Prisoner’s Dilemma in
Table 9.1, there is a specific ordering of payoffs, as shown in Table 9.3. Just
as in the Prisoner’s Dilemma, the best combined payoff, or profit, is if
both firms co-operate and maintain price. Note that co-operation here does
not mean explicit collusion, rather it refers to tacit co-operation. Again, this is
not an equilibrium situation; the equilibrium (explained shortly) is for
both firms to discount.