Consider a "prisoners' dilemma" game consisting of two firms in collusion to maximize profit.However,the game is repeated indefinitely and each player employs a tit-for-tat strategy.The equilibrium described here 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 an indefinitely repeated prisoners' dilemma game with a tit-for-tat strategy, firms can sustain cooperation over time, leading to a cooperative equilibrium where both firms continue to collude to maximize profits.

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