> In a lot of situations, you may not even know who is cheating and by how much, but you might be sure someone is cheating. This will feed back into your own incentives to cheat. I believe OPEC suffers from this a lot.
In situations like OPEC, it's also really different. You don't have everyone on an equal footing like in the classroom game.
If Venezuela can only produce 1 barrel/day and Saudia Arabia can produce 50 barrels/day, it doesn't matter how cheaply Venezuela prices their barrel. But oil is also a market where the appetite of the consumer severely outstrips availability. As long as you can produce large quantities of oil you can pretty much name your price (so long as that's large quantities in relation to other producers).
In situations like OPEC, it's also really different. You don't have everyone on an equal footing like in the classroom game.
If Venezuela can only produce 1 barrel/day and Saudia Arabia can produce 50 barrels/day, it doesn't matter how cheaply Venezuela prices their barrel. But oil is also a market where the appetite of the consumer severely outstrips availability. As long as you can produce large quantities of oil you can pretty much name your price (so long as that's large quantities in relation to other producers).