Assume this is a repeated game (rather than a one-time game) and that the intera
ID: 1254636 • Letter: A
Question
Assume this is a repeated game (rather than a one-time game) and that the interaction between the two firms occurs indefinitely. Collusion, with a credible threat, would not be necessary to achieve the $60/$57 outcome because the
a. present value of cooperation may exceed the one-time gains from deviating from the $35-$35 pricing strategy.
c. present value of cooperation may exceed the one-time gains from deviating from the $40-$40 pricing strategy.
d. future value of cooperation may exceed the one-time gains from deviating from the $40-$40 pricing strategy.
a. present value of cooperation may exceed the one-time gains from deviating from the $35-$35 pricing strategy.
b. future value of cooperation may exceed the one-time gains from deviating from the $35-$35 pricing strategy.c. present value of cooperation may exceed the one-time gains from deviating from the $40-$40 pricing strategy.
d. future value of cooperation may exceed the one-time gains from deviating from the $40-$40 pricing strategy.
Explanation / Answer
the first question is A, this is nash equilibrium second question is A third question is D I hope this helps. I love Game theory, if you have anymore questions, please message me and let me know you posted. I will answer right away for you.