The show mentioned this along with the scholar Anatol Rapoport who used the "tit for tat" strategy to win a prisoner's dilemma tournament. This game has applications in economics. I play it in my class then talk about how it relates to oligopoly in microecomics. Oligopoly is a market structure where a small number of firms dominate, like the auto industry. The idea in the prisoner's dilemma is that two criminals are being interrogated in separate rooms. It turns out that they would both be better off (in terms of how much jail time they will get) if they don't confess to a crime. But if one confesses while the other does not, the confessor gets alot less jail time while the one who did not gets alot more. So they each have a temptation to confess even though they would both be better off if they did not confess. How exactly this works is explained here and here. How things worked in the tournament that Rapoport won is described here. His method of playing turned out to be the best even though it was simple. How all of this works for the oligopoly and how those firms set prices is explained here.
In the tournament, players can choose two possible moves on each play: cooperate or defect. Cooperate means playing nice and not getting too greedy. Each player makes a move and gets points depending not only on what move they made but on what move the other player made. The "tit for tat" strategy means being nice (cooperating) but punishing (defecting) if the other player defects. If both players cooperate, they get more points than if they defect. But the temptation to defect is strong because if you defect when the other person is trying to cooperate, you get even more points (and the cooperator gets less). With the firms in oligopoly, cooperate is charge a high price. But the temptation is to defect, charge a lower price, and make more profit than your competitor. But then they start lowering the price, too, and you both make less profit than if you both charged a high price.