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15. The following is a case study using a recent event: CVS versus Walgreens: An interesting recent case involves two pharmacists CVS and Walgreens. Rather than a situation where the two indulge in a competitive battle against each other over advertising or a price war, they battle against each other on the services offered. In early June 2010, Walgreens announced that it would "no longer par- ticipate in new and renewed benefit plans from its rivals (CVS) drug benefits unit" (CNN Money, June 7 2010). The main grievance of Wal- greens was CVS Caremark's Maintenance Choice Plan which started requiring patients that have chronic medical conditions to fill their pre- scriptions at CVS pharmacies only rather than giving them the choice to fill it at Walgreens (or other pharmacies). As a result of this an- nouncement both companies shares fell - CVS fell 8% and Walgreens fell 2.7%. As a response CVS in a couple of days decided to drop Wal- greens from its pharmacy benefits plan, which would force some of its benefits customers to pay a much larger amount to get their drugs from Walgreens, leading to a potential loss of customers for Walgreens. As a result CVS shares fell 1.5% and Walgreens fell 3%. Eventually, about a week later the two pharmacies decided to end their war, coming to a compromise agreement the financial terms of which were not disclosed. As a result both firms saw their stock values increase. Briefly comment on this example as an application of the Prisoners Dilemma game (10 points)