ABSTRACT
The earliest and most frequently studied game in economics is the oligopoly game. In this game is displayed the archetypical dilemma which arises in noncooperative games: there are outcomes which the participants unanimously prefer to the static equilibrium, but problems of coordination must somehow be resolved before such preferred outcomes can be attained. Collusion, if successful, maximizes the profit of each producer in an oligopolistic industry; but each has an immediate incentive to produce more than its share of the collusive output level.
