How OPEC’s Prisoner’s Dilemma Could Trigger An Oil Correction

by Tim Smith
Daily Pfennig

If you ever took Econ 101, I’m sure you remember the concept of “prisoner’s dilemma.” It shows why two completely “rational” individuals might not cooperate, even if it’s in their best interests to do so.

The basic version goes like this…

Two criminals are arrested. Each prisoner is in solitary confinement with no means of communicating with the other. Lacking sufficient evidence to convict them on the principal charge, the prosecutor plans to sentence them to a year in jail on a lesser charge.

Continue Reading at…