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Why parties in a cartel will cheat

2 videos
You know what Nash equilibrium is (from the other tutorial). Now we apply it to a scenario that is fairly realistic--parties to a cartel cheating. A cartel is a group of actors that agree (sometimes illegally) to coordinate their production/pricing to maximize their collective economic profit. What we will see, however, is that this is not a "Pareto optimal" state and they will soon start producing more than agreed on.

Why parties to cartels cheat

VIDEO 11:19 minutes
Why duopolists would benefit to form a cartel and why it makes sense for them to cheat

Game theory of cheating firms

VIDEO 9:20 minutes
Pareto Optimality and more on Nash Equilibrium. Seeing how cheating duopolists parallels the prisoners dilemma