Consider a remote town in which two restaurants, All$-$You$-$Can$-$Eat Cafe$$ and GoodGrub Diner, operate in a duopoly. Both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within $80$ miles of town. Both restaurants know that if they clean up$,$ they will attract more customers, but this also means that they will have to pay workers to do the cleaning.

If neither restaurant cleans, each will earn $$12,000$; alternatively, if they both hire workers to clean, each will earn only $$9,000.$ However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $$16,000,$ and the other restaurant will make only $$4,000.$