You've read about the prisoner's dilemma in the background readings.Suppose you are a business owner with just one main competitor.If neither you nor your competitor cut your prices, you will both be more profitable.However, if your competitor lowers its prices and you keep your prices high, then you will lose all of your sales to your competitor.Every month you and your competitor place advertisements in the local newspaper with your price - so you need to decide each month whether or not to keep prices high, or lower them based on what you think your competitor might do.

Go to the following webpage and test out some of your potential price strategies:

http://www.gametheory.net/Mike/applets/PDilemma/Pdilemma.html

The strategy "defect" indicates lowering your prices. The strategy "cooperate" means keep prices the same. Try out different strategies, such as cooperating all the time or defecting sometimes.There are five different rounds of this game, each with a competitor with different personalities and different strategies.Play all five rounds and experiment with different strategic approaches.Report your scores for each round, and discuss which strategies seemed to work the best for you.