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

Question

Quizplus · Accepted Answer

The tit-for-tat strategy involves responding to a rival's actions by mirroring those same actions. If the rival cheats, the firm will cheat back. If the rival cooperates, the firm will also cooperate. This strategy is designed to promote cooperation and deter cheating behavior. Therefore, the best choice is D - tit-for-tat strategy.

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