Firms in oligopoly often behave like the prisoners in the prisoners' dilemma,carefully
anticipating the moves of their rivals in an uncertain environment.

Question

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Oligopoly firms often engage in strategic decision-making based on their expectations of their rivals' actions, similar to how prisoners in the prisoners' dilemma game make decisions based on their expectations of the other prisoner's actions. The uncertainty in the market makes it difficult for firms to make decisions on their own without considering the actions of their rivals.

Firms in Oligopoly Often Behave Like the Prisoners in the Prisoners