What is the prisoners dilemma?

The "prisoner's dilemma" is a concept that describes a situation in which two people have competing incentives that lead them to choose a suboptimal outcome. Prisoners dilemma: Both win if they both keep their mouth shut. Each win if they blame the other without reciprocation. Example (See pic): Success of price cut depends on the responses of rivals: if rivals do not match, the price-cutter gains market share; but if rivals follow the price cuts, nobody gains market share and all players suffer from the lower prices.