Prisoner’s Dilemma Reflection
University of Phoenix
ECO/561
Prisoner’s Dilemma Refection
According to Dixit (2008), “The prisoners’ dilemma is the best-known game of strategy in social science. It helps us understand what governs the balance between cooperation and competition in business, in politics, and in social settings” (para. 1). After viewing the Prisoner’s Dilemma video, Team C explains how the theory would apply to pricing decisions in relation to the United States airline industry.
The United States Airline Industry Overview
“The economics of air service have changed. With the impending merger of American and US Airways, there will be just nine major scheduled airlines, and all have specific route strategies” (Boyd Group International, 2013, pp. 4-5). Boyd Group International (2013) states, “Open and robust take-traffic-from-the-competition strategies are mostly a thing of the past. Alliances and code-sharing between major carrier systems, combined with an increased focus on hub turf, now defines airline strategies” (p. 6).
Boyd Group believes the jet airliner fleets will decrease by 2015 in North America with gradual increase in 2016. Predictions deem Delta as the industry leader in 2013, contributing factors include the retirement of RJ-cabin airliners, 50-seat and smaller will be discontinued by 2017. It is projected the future use of CRJ-700/900/1000 variants will be exclusively implemented by 2017, increasing unit capacity (Boyd Group International, 2013). “The options and potential for new service recruitment are shrinking fast” (Boyd Group International, 2013, p. 5).
Prisoner’s Dilemma Overview
The Prisoner’s Dilemma simulation is an exercise designed to look at decision making, communication, ethics, and responsibility. Presented in a game show format, the host introduces two small business owners who compete in the same convenience store industry. The first contestant is Sharon Jameson, a...