Exhibit 11-5
-Reputation and cooperation are more difficult to achieve when
A)firms find it difficult to observe the behavior of other firms.
B)a game is repeated.
C)there are only two firms as opposed to three or more firms.
D)firms can easily observe what other firms are doing.
E)firms act out of their own self-interest.

Question

Exhibit 11-5 
-Reputation and cooperation are more difficult to achieve when
A)firms find it difficult to observe the behavior of other firms. 
B)a game is repeated. 
C)there are only two firms as opposed to three or more firms. 
D)firms can easily observe what other firms are doing. 
E)firms act out of their own self-interest.

Quizplus · Accepted Answer

When firms find it difficult to observe the behavior of other firms, it becomes harder to build a reputation and trust with them. This makes cooperation more difficult to achieve.

Exhibit 11-5 -Reputation and Cooperation Are More Difficult to Achieve When