S/E/60. Prisoners Dilemma within ‘duopolic markets. With reference to examples with which you are familiar, evaluate the extent to which behaviour in duopoly markets can be explained by the prisoners dilemma game and assess the impact of repeating this game upon an organisations behaviour.

The paper looks at the popular model of Game Theory- The Prisoners Dilemma – and accesses its use in explaining the behaviour of the key players in a duopolic marketplace. An attempt has been made to observe real-world examples in various fields (technology to cola). While the actions and reactions of the firms may have evolved based on intuition and/or basic business principles, it is realised that the Prisoners Dilemma model succeeds in satisfactorily explaining the behaviour of the firms. This also implies that managers that have a basic knowledge of the Game Theory can possess a unique edge over their competitors.