Refer to the Payoff Matrix

question 287

Multiple Choice

Refer to the payoff matrix. Suppose that Alpha and Beta agree that they will both pursue a high-price strategy. If Beta then cheats on the agreement in order to increase profits, which of the following is true?

• A)If this is a repeated game, Alpha can be expected to pursue a low-price strategy in future games.
• B)If this is a one-time game, a Nash equilibrium will result.
• C)A Nash equilibrium cannot be reached through repeated playing of this game.
• D)The game is a negative-sum game.

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