Happy Campers and Camping R Us are in tacit collusion to cooperate and each charge a high price for their campers. If Happy Campers initially cooperates with Camping R Us, but then switches and charges a low price and Camping R Us responds by forever charging a low price, this is an example of________ .
A)a trigger strategy
B)a dominant strategy
C)a tit- for- tat strategy
D)a one- shot game

Question

Quizplus · Accepted Answer

This is an example of a trigger strategy, where one player unilaterally deviates from the cooperative agreement triggered by the other player's action. By charging a low price, Happy Campers triggers Camping R Us to also charge a low price, leading to a price war between the two companies.

Happy Campers and Camping R Us Are in Tacit Collusion