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That's actually quite exactly the behavior you expect from a competitive duopoly. In a duopoly, I know that if I lower prices, you'll match. Operating at the Nash Equilibrium isn't anticompetitive.

I'm not disagreeing with the conclusion -- I agree that they are colluding -- but the logic isn't right.

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I'll tell you a secret. Game theory and economics is mostly voodoo wrapped up in statistical mumbo-jumbo. In other words, if economists could explain what is happening, why are they poor and have to go to work to make living?

I'll tell you another secret: Basic economics works pretty well and isn't very hard.

Economists are poor because there isn't any competitive advantage. Any competently-run business of any significant size should have plenty of people able to apply basic economics. Engineers who don't learn basic econ are at a disadvantage, on the other hand.

What is basic economics for you? The supply and demand model which only works if you assume 2 to 10 things (depending on the author), where atleast 1 of them is completely irrational or doesn't reflect reality?

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