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Questions and Answers
Ryanair was founded in 1985 as a low-cost domestic airline in the United States.
Ryanair was founded in 1985 as a low-cost domestic airline in the United States.
False
The winning strategy of the repeated prisoner's dilemma tournament was called 'Tit for Kuk'.
The winning strategy of the repeated prisoner's dilemma tournament was called 'Tit for Kuk'.
False
In an oligopoly, competing companies may engage in collusion to keep prices high.
In an oligopoly, competing companies may engage in collusion to keep prices high.
True
The judo strategy suggests moving head-on against a stronger opponent to win a conflict.
The judo strategy suggests moving head-on against a stronger opponent to win a conflict.
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Overfishing occurs when fishermen collaborate to limit their catch sustainably.
Overfishing occurs when fishermen collaborate to limit their catch sustainably.
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The Prisoner’s Dilemma highlights the conflict between personal gain and mutual benefit.
The Prisoner’s Dilemma highlights the conflict between personal gain and mutual benefit.
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In political campaigns, running positive campaigns typically guarantees a higher chance of winning.
In political campaigns, running positive campaigns typically guarantees a higher chance of winning.
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The Cold War's arms race was characterized by a mutual distrust between the U.S. and Soviet Union.
The Cold War's arms race was characterized by a mutual distrust between the U.S. and Soviet Union.
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Study Notes
Southwest Airlines and Ryanair
- Southwest Airlines was the first low-cost airline, founded in 1967.
- Ryanair, founded in 1985, was a European low-cost airline aiming for minimal costs.
Prisoner's Dilemma
- A game theory concept where two parties must choose between cooperation and betrayal.
- Uncertainty about the other's choice creates tension.
- Relevant in business when firms, competitors, or partners make decisions.
Cooperation vs. Competition
- Price competition: Coke vs. Pepsi
- Advertising: McDonald's vs. Burger King
- R&D/Innovation: Apple vs. Samsung
- Sustainability: Shell vs. BP
Strategic Decision-Making Example (Airlines)
- Ryanair can choose to enter the UK-Ireland route, potentially facing competition from Aer Lingus & British Airways.
- Or they can remain outside the market.
Repeated Prisoner's Dilemma Tournament
- A 1980s experiment by Robert Axelrod.
- Different strategies were tested in a repeated game.
- The winning strategy was "Tit for Tat" — cooperate first, then mirror the opponent's prior move.
- Reciprocity promotes cooperation.
Real-World Applications of Prisoner's Dilemma
- Arms Race (Cold War): US and Soviet Union's dilemma between nuclear arms build-up and disarmament. Lack of trust fuelled proliferation.
- Corporate Collusion: Companies might collude to raise prices. If one lowers prices, market share gains result.
- Overfishing: Fishermen mutually benefit from limiting catches, but overfishing occurs if some exceed limits.
- Political Campaigns: Candidates choose between positive campaigns or attacks. Mutual attacks alienate voters.
- Workplace Collaboration: Teamwork boosts productivity. Individual withholding of effort negatively impacts the whole team's performance.
Judo strategy
- A strategy to avoid direct confrontation.
- Move to uncontested areas.
- Yield to superior force when necessary.
- Utilize the opponent's strength against them.
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Description
Explore the dynamics of game theory with a focus on major airline competitors like Southwest and Ryanair. Understand the implications of the Prisoner's Dilemma in the context of strategic decision-making and competition. This quiz combines real-world scenarios with theoretical frameworks to provide a comprehensive overview.
