Competitive Moves 89
in jail, each with the choice of squealing on each other or maintain- ing silence. If neither prisoner squeals, both go free. If they both squeal, both get hanged. If one prisoner talks and the other does not, however, the squealer not only gets off scot-free but also collects a bounty for his trouble. Both prisoners taken together are better off if they can avoid squealing at all. But acting in his own self-interest, each prisoner has an even greater incentive to squeal provided the other does not have the same idea. Translating this problem into the setting of oligopoly, if firms are cooperative they all can make a rea- sonable profit. However, if one firm makes a self-interested strategic move to which others do not retaliate effectively, it can earn even higher profits. If its competitors retaliate vigorously against the move, though, everybody can be worse off than if they were all co- operative.
Competitive Moves 89in jail, each with the choice of squealing on each other or maintain- ing silence. If neither prisoner squeals, both go free. If they both squeal, both get hanged. If one prisoner talks and the other does not, however, the squealer not only gets off scot-free but also collects a bounty for his trouble. Both prisoners taken together are better off if they can avoid squealing at all. But acting in his own self-interest, each prisoner has an even greater incentive to squeal provided the other does not have the same idea. Translating this problem into the setting of oligopoly, if firms are cooperative they all can make a rea- sonable profit. However, if one firm makes a self-interested strategic move to which others do not retaliate effectively, it can earn even higher profits. If its competitors retaliate vigorously against the move, though, everybody can be worse off than if they were all co- operative.
การแปล กรุณารอสักครู่..
