If a Prisoner's Dilemma Game Is Repeated Daily, Such That

question 118

Multiple Choice

If a prisoner's dilemma game is repeated daily, such that two rival stores choose a price simultaneously each morning for an extended number of days, which outcome can happen?

• A) The Nash equilibrium will continue to be played throughout the game.
• B) The Nash equilibrium will continue to be played only until one firm engages a trigger strategy against the other.
• C) There will more likely be cooperation to achieve an outcome different from the Nash equilibrium that is better for both firms.
• D) An outcome different from the Nash equilibrium would occur; however, only one firm will be better off.

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