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Why do firms find it difficult to form a cartel?

Prisoners dilemma is only a 2-person game, but such games can provide insights into to multi-person situations throughout the world (as we saw with the Law Clerk Matching example). Games can be extended to multiperson situations: games are essentially just a list of players, a list of possible actions (or strategies) that each player can choose from and a list of the payoffs each player receives for each combination of strategies.

A cartel is any coalition of firms that conspires to restrict production for the purpose of earning higher economic profits.

[SHOULD I DO OPEC HERE OR DOES SOMEONE HAVE A MORE INTERESTING EXAMPLE?]

 
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