If your brother or sister earns a living at JCPenney you may have to cut short the Thanksgiving family time spent together. At 8pm, the retailer announced last week, most of its 1,100 stores will open their doors. JCPenney had no choice. Macy’s announced a few days ago that it will be open as well, breaking with a century and a half tradition. Two years ago, Toys R Us started this, and Wal-Mart, Target and others followed suit last year.
Why does JCPenney have no choice? This is a classic case of the Prisoners’ dilemma in game theory. The best outcome of the game occurs when all retailers cooperate (i.e. stay closed on Thanksgiving). But the incentive to defect is extremely strong, in the hope that your shop could be the only one open and boost its sales. Continue reading