In Cases Where a Cartel Controls Access to a Key

question 98

Multiple Choice

In cases where a cartel controls access to a key production input, firms in the cartel:

• A) will always have an incentive to cheat on the agreement as cheating increases profits.
• B) have less incentive to cheat for fear that they will be cut off from the key input.
• C) are typically good at finding ways to access the key input outside the cartel.
• D) will never cheat on the cartel agreement.

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Definitions:

Observational Learning

The process of learning by watching others, retaining the information, and then later replicating the behaviors that were observed.

Imitation

The action of using someone or something as a model and attempting to replicate their behavior or actions.

Observational Learning

A learning process that occurs through observing the behavior of others and the outcomes of those behaviors.

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, which was developed by B.F. Skinner.