When one firm responds to a rival's cheating by cheating and to a rival's cooperation by cooperating, that firm is practicing a:
A) dormant strategy.
B) trigger strategy.
C) conclusive strategy.
D) tit-for-tat strategy.

Question

Quizplus · Accepted Answer

Tit-for-tat strategy involves responding to a rival's cheating by cheating in return and responding to a rival's cooperation by cooperating in return. This strategy is meant to encourage cooperation and discourage cheating in the long run, as it creates a cycle of reciprocal behavior that can benefit both parties. The other options (A, B, and C) do not accurately describe this strategy.

When One Firm Responds to a Rival's Cheating by Cheating