In some games, one firm may avoid taking advantage of another firm because it knows that the other firm can take advantage of it in subsequent games. This behavior is called

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Reciprocity in game theory refers to the strategy where a firm refrains from exploiting another firm in the short term because it anticipates that the other firm could retaliate or cooperate in future interactions, leading to a more favorable long-term outcome for both.

In Some Games, One Firm May Avoid Taking Advantage of Another