Assume that in a price-fixing game, if Player A breaks the agreement in the first year, she earns $11 while Player B earns $5 . However, if Player A breaks the agreement once, Player B decides to break the agreement for eternity, leaving each to receive $8 per year for the rest of their lives. If they both keep the agreement each receives $9 per year for the rest of their life. If the discount
rate is 120 percent per period:
a. Player A will prefer to break the agreement in the first year.
b. Player A will prefer to break the agreement in the second year.
c. Player A will prefer to keep the agreement throughout her life.
d. Player A will prefer to keep the agreement only for the first five years.
A
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If 10 workers can produce 1,500 units of output and 11 workers can produce 1,600 units of output, then the average product of 11 workers is
A) 1,600 units. B) 1,500 units. C) 145.5 units. D) 100 units. E) 136.4 units.
Publicly available data on production costs and box office revenues reflect that:
a. R-rated movies on an average collect higher revenues than G-rated movies. b. revenue collected by PG-rated movies donot cover the production and distribution costs. c. G-rates movies help investors to make artistic or polictical statements. d. family-rated movies are on average profitable.