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Table 12.32
-(Table 12.32) Two firms have formed an agreement to restrict output. They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. At what value of d (discount rate) would Firm A be indifferent about keeping the agreement or cheating on the agreement?

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Use the following to answer question:
Table 12.32 
-(Table 12.32) Two firms have formed an agreement to restrict output. They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. At what value of d (discount rate) would Firm A be indifferent about keeping the agreement or cheating on the agreement?

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Table 12.32 
-(Table 12.32) Two firms have formed an agreement to restrict output. They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. At what value of d (discount rate) would Firm A be indifferent about keeping the agreement or cheating on the agreement?

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