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One-Time Games and the Prisoner's Dilemma definitions

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  • Oligopoly
    Market structure with few firms, where each firm's decisions significantly affect competitors due to interdependence.
  • Game Theory
    Analytical framework for understanding strategic interactions where outcomes depend on choices made by multiple players.
  • One-Time Game
    Scenario played only once, with no opportunity for repeated interaction or future retaliation between participants.
  • Prisoner's Dilemma
    Situation illustrating how rational individuals may not cooperate, even when cooperation yields a better collective outcome.
  • Payoff Matrix
    Table summarizing possible outcomes for each player based on all combinations of their available choices.
  • Dominant Strategy
    Choice that provides the best outcome for a player, regardless of what the other participants decide.
  • Nash Equilibrium
    Outcome where all players select their best possible option given others' choices, resulting in no incentive to deviate.
  • Collusion
    Agreement among firms to coordinate actions, such as setting prices or quantities, often to increase collective profits.
  • Cartel
    Group of firms colluding to control market prices or output, typically illegal in many jurisdictions.
  • Implicit Collusion
    Unspoken coordination among firms, often through price leadership, without explicit agreements.
  • Price Leadership
    Situation where one firm sets a price and others follow, creating coordinated pricing without direct communication.
  • Individual Profit
    Personal gain achieved by a participant, often motivating deviation from cooperative agreements.
  • Check and X Method
    Systematic approach for identifying best responses and Nash equilibria in payoff matrices using visual markers.
  • Interdependence
    Condition where each participant's outcome is affected by the actions of others, central to strategic decision-making.