Abstract
Maital and Benjamini (1980) argue for wage and price controls on the grounds that inflation is the result of a prisoner's dilemma. In this case the equilibrium macroeconomic outcome is Pareto-inferior to an alternative outcome, but the alternative cannot be achieved without cooperation. Wage and price controls serve to enforce the superior outcome. The argument can be presented easily with the aid of the following diagram, which is adapted from Figure lB of Maital and Benjamini. Each contestant-labor and capital-has two strategies, which give rise to four possible outcomes, labeled A, B, C, D.
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