What is the prisoners dilemma result

Reference no: EM133501093

Problem

Mary and Sam are the only two growers who provide organically grown corn to Woolworths supermarkets. The table below shows each person's profits, depending on what price Mary and Sam charge.

		Mary chooses
		Low price	High price
Sam chooses	Low price	Sam earns $100 Mary earns $100	Sam earns $200 Mary earns $0
Sam chooses	High price	Sam earns $0 Mary earns $200	Sam earns $150 Mary earns $150

I. What is the prisoner's dilemma result? Explain how you arrived at the solution.

II. What is the best choice for Sam if he is sure that Mary will cooperate? If Mary thinks Sam will cheat, what should Mary do, and why?

III. Explain an oligopolistic market structure with an example.

Reference no: EM133501093

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