Final answer:
The prisoner's dilemma is a concept from game theory where pursuing dominant strategies results in negative outcomes for all involved. It highlights the difficulty in encouraging cooperation among parties whose self-interest leads to a collectively worse situation.
Step-by-step explanation:
The game in which pursuing dominant strategies results in non-cooperation that leaves everyone worse off is known as the prisoner's dilemma. This dilemma is a concept in game theory, often applied to the analysis of oligopolies. Pursuing dominant strategies in this scenario means that each player aims to maximize their own payoff without regard to the collective outcome. As a result, even though the players could achieve the highest combined benefits by cooperating, they often end up choosing self-interested strategies that lead to a worse outcome for all parties involved. The prisoner's dilemma exemplifies the challenges in encouraging cooperative behavior among parties, especially when the incentives to act in one's own interest are strong. This paradigm is pivotal in understanding not only business competition but also in broader contexts such as international relations, environmental issues, and public goods contribution, where collective action problems like free riding and the tragedy of the commons are prevalent.