(Table: Lemonade) Andrei and Sonya Operate Lemonade Stands in the Same

question 43

Multiple Choice

(Table: Lemonade) Andrei and Sonya operate lemonade stands in the same neighborhood. Payoffs are in quarters . The kids have formed an agreement to restrict output. They are playing an infinitely repeated game in which output decisions must be made every period and both of them are using tit-for-tat trigger strategies. If the discount rate is d = 0.4, then the players ____.

• A) prefer to collude rather than not to collude
• B) prefer not to collude rather than to collude
• C) are indifferent between colluding and not colluding
• D) not enough information is given in the problem to determine preference for collusion.

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Definitions:

Subliminal Priming

The use of stimuli below the threshold of conscious perception to influence thoughts or actions.

Stimuli

External agents or occurrences that cause a reaction or response in an organism or any of its parts.

Sensory Adaptation

The process by which sensory receptors become less responsive to constant stimuli, leading to a decrease in sensitivity.

Masking Stimulus

A stimulus that inhibits the perception of another stimulus, making it difficult or impossible to process on a conscious level.