When there's uncertainty as to the length of a game
A) cooperation still does not occur, because cooperation unravels at the beginning of the game.
B) cooperation can potentially occur if trigger strategies are adopted.
C) firms will cooperate because they treat the game as one that is infinitely repeated.
D) firms will randomly pick among the Nash equilibria.
B
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The buyer will pay the entire tax levied on a good when the demand for the good is ________ or when the supply of the good is ________
A) perfectly elastic; perfectly inelastic B) perfectly elastic; perfectly elastic C) perfectly inelastic; perfectly inelastic D) perfectly inelastic; perfectly elastic E) unit elastic; unit elastic
In an economy with a fixed exchange rate, when the market forces try to change the exchange rate, the government:
A. often has to deal with an unhappy domestic population who are constantly dealing with shortages or surpluses of their currency. B. declares it can't change, and holds it constant. C. must buy or sell its currency using its own reserve to bring equilibrium in the market to where it has "fixed" it. D. None of these statements is true.