Description 
As a representative of Ostrich Burger, you have entered into an illegal collusive agreement with Emu Burger. You've both agreed to maintain a high price for your burgers. If you both cooperate by honoring the agreement (and keeping prices high), you both earn an extra $300 per week. If one of you defects (by lowering prices) while the other cooperates, the defector earns an extra $500 while the cooperator loses $100. If you both defect, you both gain nothing.

For the duration of each agreement, Emu Burger will adopt one of five strategies:
Always Defect - lower price (defect) no matter what you do for Ostrich Burger
Always Cooperate - keep price high (cooperate) no matter what you do
Tit-for-Tat - do what you did the previous week
Trigger - keep price high until you defect. Once you've defected, Emu will always defect.
Random - cooperate or defect randomly

At the start of the simulation you must select a strategy for Emu Burger by choosing A, B, C, D, or E. The simulation will not reveal to you which strategy your choice corresponds to, but each letter will always represent the same strategy. You must also select a duration for the collusive agreement, in number of weeks.

Your goal is to maximize Ostrich Burger profits by making a weekly decision to cooperate or defect from the agreement. To be successful, you should try to identify which strategy Emu Burger has adopted in as few weeks as possible. Godd luck!

Before you start, it might help to hear what Marge has to say about her collusion with Emu Burger:

"My restaurant and the Emu Burger joint across the street are the only two burger shops in town. The problem is, neither of us makes as much money as we should, because we both keep lowering our price to try to take business away from each other. But since we always match price cuts, we end up making less money. If we could agree to not lower prices we could both make a lot more money."

"I've analyzed the situation and concluded that if we each maintained a higher price level we could both make an extra $300 per week. The problem with an agreement like this is that it's illegal, so if Maggie doesn't live up to her end of the bargain I have no legal recourse. If I stick to the deal and she cheats (lowers her prices) then she will earn an extra $500 and I'll lose $100. Conversely, if I cheat and she sticks to the deal, I'll make an extra $500 and she'll lose $100. If we both cheat than we both gain nothing."

"Now that we have a deal, I have a decision to make: Should I live up to my end of the bargain? Maggie has no recourse against me if I don't; by the same token I have no recourse if she doesn't live up to her end of the deal.?

"You need to help me make my decisions. Our goal is to make as much money as possible. Remember that you have to make your decision without knowledge of Maggie's decision. For each week, you have two choices: High price (cooperate) or low price (defect). Remember that our goal is to maximize our gain, not to minimize hers."
 
 
 
 
 

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