MGEA02H3 Lecture Notes - Lecture 19: Product Differentiation, Computer Hardware, E-Book

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEA02H3
• Professor: Jack Parkinson

Document Summary

Mgea02h3 lecture 19 applications of duopoly. Lecture 19 will cover chapter 14 of the microeconomics textbook and supplement b, which (cid:272)a(cid:374) (cid:271)e fou(cid:374)d o(cid:374) the (cid:272)ourse"s bla(cid:272)kboard. The priso(cid:374)ers" dile(cid:373)(cid:373)a is the (cid:271)est-known game, helping us understand what governs the balance between cooperation and competition in business, in politics, and in social settings. In the traditional version of the game, the police have arrested two suspects and are interrogating them in separate rooms. Each can either confess, thereby implicating the other, or keep silent. No matter what the other suspect does, each can improve his own position by confessing. If the other confesses, then one had better do the same to avoid the especially harsh sentence that awaits a recalcitrant holdout. If the other keeps silent, then one can obtain the fa(cid:448)ora(cid:271)le treat(cid:373)e(cid:374)t a(cid:272)(cid:272)orded a state"s (cid:449)it(cid:374)ess (cid:271)(cid:455) (cid:272)o(cid:374)fessi(cid:374)g. thus, the confession is the dominant strategy for each.