As far as I know, capitalism is based on competition: If two(or more) companies produce similar products that compete against other, these companies are in a competition. Because the objective of a company is to earn as much money as possible, the company will try to maximise the selling of their product. However, because normally there are more than a single company, every company has to sell their best possible product for the lowest price without making enough profit. That leads to a situation where the consumer gets a very good product for a very fair-realistic price.
My problem here is, that this only works if every company only can make the decision about what price they make for what quality once. Like in the prisoner's dilemma. The prisoner (the company) will (usually; if he is sane) make the decision to betray his member (->Game Theory). The point is the ideal strategy changes if this 'game' will be repeated forever (is identical to a situation where nobody knows, when the game ends). The strategy any sane prisoner would take is to not betray his gang-member, however, if his member betrays him he will betray him, too, until his member does not betray him anymore. Because this is a simplified version of a real competition, real companies should act like the prisoners: make a high price until the competitor make a low price. However, no company would make a low price because although they would make better profit in short term, the company would make better in longterm if they made the unspoken deal with the other companies.
So why is it not like this in real world, or is it like this and I haven't noticed that yet?