Game Theory Forum

"Inside every small problem is a large problem struggling to get out."

Topics

Ask a question about: Experimental Economics
Respond to the question : Question about pricing theory?

02/27/2001 11:08 AM by Brandon;
Think of the customers of the 2 firms as the police officer who caught them and are going to charge them in court :) He can "put the blame, all of it" on the one who do not confess and let the other go. Here, the customer has perfect [View full text and thread]

02/27/2001 12:56 AM by Brandon; Prisoners' dilemma
Hi! See if I can help... Well, the typical translation of the prisoners' dilemma to economics translate their plight into the situation of duopolists deciding on their pricing. If both set a high price, their profit is higher [View full text and thread]

02/26/2001 03:40 PM by T.L.; Question about pricing theory
In the prisoner's dilemma, competitor A & B benefit by raising price (more profits). But Prof. Levine says competitor A can get more utility by not raising price and stay low price. I don't understand this. It seems competitor B will produce greater profits than competitor A ( assuming inelasticity <1) Is the rationale that competitor A will capture market share from competitor B? Can someone explain this? [Manage messages]