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In the second case, if both firms undercut each other,
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you end up with low prices,
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that's actually good for consumers but bad for firms.
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Let me mention a third example.
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Suppose there's a common resource out there,
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maybe it's a fish stock or maybe it's the atmosphere.
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There's a Prisoners' Dilemma aspect to this too.
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You might have an incentive to over fish.
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Why?
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Because if the other countries with this fish stock--
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let's say the fish stock is the Atlantic--
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if the other countries are going to fish as normal,