A Level Economics · Edexcel 9EC0 Theme 3.4 · Oligopoly and game theory
You run Northgate Fuel, one of only two petrol stations on the edge of town. Each week you and your rival set your prices at the same moment: keep them high, or undercut. You will face four rivals, each playing a secret strategy.
Your profit is the big number and your rival's is underneath. If you both charge high prices you share the market at a good margin. If one undercuts, it takes most of the customers.
Choose your price for this week. Your rival is choosing at the same time.
The Economics Tutor · Northgate Fuel and its rivals are fictional. Weekly profits are illustrative. The strategies are based on Robert Axelrod's 1980 prisoner's dilemma tournaments.
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