Which of the following is true?
A) For a finitely repeated game, the game is played enough times to effectively punish cheaters, and therefore collusion is likely.
B) In an infinitely repeated game with a low interest rate, collusion is unlikely because the game unravels so that effective punishment cannot be used during any time period.
C) A secure strategy is the optimal strategy for a player no matter what the opponent does.
D) None of the preceding answers is correct.

Question

Quizplus · Accepted Answer

None of the given options are completely true. Finitely repeated games may not necessarily effectively punish cheaters, and collusion may not always occur. In an infinitely repeated game with a low interest rate, collusion is still possible if the players anticipate future interaction. A secure strategy is not always the optimal strategy, as it may not maximize payoff in all scenarios.

Which of the Following Is True