I’m reading Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life. Aside from being the most expansive introduction to game theory on the market, the historical stories and anecdotes are very interesting. For example the following paragraph is quoted from page 227:

“To arrange a self-enforcing cartel is difficult. It is all the better if an outsider enforces the collective agreement limiting competition. This is just what happened for cigarette advertising, although not intentionally. In the old days, cigarette companies used to spend money to convince consumers to ‘walk a mile’ for their product or to ‘fight rather than switch.’ The different campaigns made advertising agencies rich, but their main purpose was defensive – each company advertised because the others did too. Then, in 1968, cigarette advertisements were banned from TV by law. The companies thought this restriction would hurt them and fought against it. But, when the smoke cleared, they saw that the ban helped them avoid mutually damaging and costly advertising campaigns and thus improved their profits.”

Well congratulations to the federal government on another job well done.