Describe how if a price-fixing game is repeated over and over, the cooperative outcome might be attained.
What will be an ideal response?
When a game is repeated, it becomes possible for firms to punish cheaters who deviate from an agreement by lowering their profits in future periods of the game. Examples of this are the tit-for-tat strategy and the grim trigger strategy described in the book.
Economics
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Explain why the FDIC is following a "too-big-to-fail" policy of fully protecting all depositors at the largest banks
What will be an ideal response?
Economics
The general rule to increase profits when two close complementary brands are jointly owned is
a. Increase prices for both brands b. Decrease prices for both brands c. Increase prices on one brand, decreasing it for the other d. Increase prices on one brand, keeping the prices of the second brand constant
Economics