If a game is repeated over and over again, firms have a greater incentive to cooperate because
A)there is nothing to gain from not cooperating each time the game is played.
B)each makes its highest possible profit every time the game is played.
C)reputations can be made and there is much to gain in the long run.
D)neither has anything to gain from not cooperating.
E)they have too much information about the rival firm.

Question

Quizplus · Accepted Answer

When a game is repeated over and over again, reputations can be made and there is much to gain in the long run. This encourages firms to cooperate rather than trying to take advantage of each other.

If a Game Is Repeated Over and Over Again, Firms