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Prisoners’ Dilemma in Duopoly (Super)games

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  • Luca Lambertini

    (Institute of Economics, University of Copenhagen)

Abstract

The choice between quantity and price in order to stabilize collusion is modeled here. It is shown that this relocates the prisoners’ dilemma backwards, from the market stage to the stage where the market variable is chosen in order to sustain collusion, and where discount rates appear as the payoffs. Likewise, a prisoners’ dilemma arises also when both the market variable and the type of behavior (cooperative or non-cooperative) are simultaneously chosen.

Suggested Citation

  • Luca Lambertini, 1997. "Prisoners’ Dilemma in Duopoly (Super)games," CIE Discussion Papers 1997-08, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  • Handle: RePEc:kud:kuieci:1997-08
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    References listed on IDEAS

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    1. Val Eugene Lambson, 1987. "Optimal Penal Codes in Price-setting Supergames with Capacity Constraints," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 385-397.
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    More about this item

    Keywords

    meta-game; supergame; prisoners’ dilemma;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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