A duopolists' dilemma occurs when two firms in a market would be better off if

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In a duopolists' dilemma, both firms would be better off if they choose the high price, but the dominant strategy leads them to choose the low price. This results in lower profits for both firms. Therefore, the best choice would be for both firms to coordinate and choose the high price, but the dilemma arises as each firm has an incentive to deviate from the agreed upon high price and choose the low price instead.

A Duopolists' Dilemma Occurs When Two Firms in a Market