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Suppose there are only two firms in some industry making it an Oligopoly (more specifically a Duopoly, a two firm Oligopoly).
To the right is a payoff matrix which represents a version of the oligopolists' dilemma.
You should be able to examine the payoff matrix to the right and determine that both firms have dominant strategies. Firm 1 should always charge Low prices. If Firm 2 charges a Low price Firm 1 will earn payoffs of 8 rather than 6 if it also charges a Low price. If Firm 2 charges a High price then by charging a Low price Firm 1 earns payoffs of 15 rather than the 12 it would earn with a High price.
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