A Beautiful Mind and Game Theory
In this video clip from the movie, A Beautiful Mind, the concept of cartels and game theory is taught during a scene at a club. All of the men in the group are interested in pursuing the same blond woman. John Nash, the main character, then suggests that all the men make a deal where no one gets the blond and instead, they each pursue one of her less attractive but still desirable friends. In this deal everyone agrees, yet there is a huge incentive to cheat, much like in a situation between cartels in oligopolies.
- What are the advantages and disadvantages to forming cartels?
- What is an example of a situation whre businesses have formed cartels in the past?
- How can forming a cartel destroy the functionality of an industry?