The Prisoner’s Dilemma for Oligopolists: two by two matrix. Top left cell: Both Firm A and Firm B hold down output which results in both Firm A and Firm B getting $1,000 each. Top right cell: Firm A holds down output and Firm B increases output resulting in Firm A getting $200 and Firm B getting $1,500. Bottom left cell: Firm A increases output and Firm B holds down output resulting in Firm A getting $1,500 and Firm B getting $200. Bottom right cell: Both Firm A and Firm B increase output which results in both Firm A and Firm B getting $400 each.
