If Two Firms That Form a Cartel Agreement Are in a Prisoner's

question 129

Multiple Choice

If two firms that form a cartel agreement are in a prisoner's dilemma game, then

• A)both firms will have an incentive to break the agreement.
• B)only one firm will have an incentive to break the agreement.
• C)both firms will be better off if they hold to the agreement than if they break it.
• D)a and c
• E)b and c

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Definitions:

Collection of Individuals

A group of people gathered together without necessarily having a shared purpose, distinct from a team which is united by common objectives.

Team Effectiveness

Refers to the capacity of a group of individuals to achieve their goals and objectives effectively and efficiently.

Leader

A person who influences and guides others towards achieving a common goal.

Unified Commitment

A collective dedication to a common goal or purpose, where all members of a group or organization are engaged and cooperative.