Question

Q1 . Some countries have had laws restricting the opening of merchandise shops on Sunday. Most consumers, however, oppose such regulations because they find Sunday a convenient day to shop. Ironically, merchant associations frequently support such laws. Using Prisoner's dilemma, explain the reason behind the merchants' support for these laws.

Answer 1

Prisoner's dilemma is the best example why two completely rational individuals do not cooperate with each other inspite of knowing that it is in their best interests to do so. Although merchants association know very well that opening the merchandise shops on Sunday is in the best interest of merchants as well as customers but still they oppose it. Opening the merchandise shops on Sunday will increase the sales of the merchants as maximum foot falls in the market is on Sundays only. Moreover, it is convenient for the customers also to shop on Sunday. But still just to support the government law, merchant associations support the law of restricting the opening merchandise shops on Sunday.