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One-Time Games and the Prisoner's Dilemma definitions

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  • Game Theory
    Analysis of strategic interactions where outcomes depend on the choices of all involved participants.
  • Oligopoly
    Market structure with few firms, where each firm's decisions significantly impact competitors.
  • One-Time Game
    Situation played only once, with no opportunity for future retaliation or cooperation.
  • Prisoner's Dilemma
    Scenario illustrating why rational individuals might not cooperate, even if it benefits both.
  • Payoff Matrix
    Table displaying possible outcomes for each player based on all combinations of strategies.
  • Dominant Strategy
    Option yielding the best result for a player, regardless of the other participant's choice.
  • Nash Equilibrium
    Outcome where all players choose their best possible action, given the choices of others.
  • Collusion
    Agreement among firms to coordinate actions, such as setting prices or output, often illegally.
  • Cartel
    Group of firms acting together to control prices or output, like OPEC in the oil market.
  • Implicit Collusion
    Unspoken coordination among firms, often through price leadership, without formal agreements.
  • Price Leadership
    Practice where one firm sets a price and others in the market follow, influencing overall pricing.
  • Incentive to Cheat
    Temptation for a participant to break a cooperative agreement to increase individual benefit.
  • Strategic Interaction
    Situation where each participant's outcome depends on the actions of others.
  • Check and X Method
    Technique for identifying dominant strategies and Nash equilibria in payoff matrices using marks.