In some games, one firm may avoid taking advantage of another firm because it knows that the other firm can take advantage of it in subsequent games. This behavior is called

Question

Quizplus · Accepted Answer

This behavior is known as reciprocity, where firms avoid taking advantage of each other in order to maintain trust and a cooperative relationship for future interactions. The other options are not applicable in this scenario.

In Some Games, One Firm May Avoid Taking Advantage of Another