Consider a "prisoners' dilemma" game consisting of two firms in collusion to maximize profit.The game is repeated indefinitely and each player employs a tit-for-tat strategy.The equilibrium when the two firms share the monopoly profit is called a
A)credible strategy equilibrium.
B)dominant player equilibrium.
C)duopoly equilibrium.
D)trigger strategy equilibrium.
E)cooperative equilibrium.

Question

Quizplus · Accepted Answer

In a repeated prisoners' dilemma game with a tit-for-tat strategy, firms can sustain cooperation and share monopoly profits, leading to a cooperative equilibrium.

Consider a "Prisoners' Dilemma" Game Consisting of Two Firms in Collusion