In an indefinitely repeated game, a firm might use a ________ to ________ a rival that defects from a cooperative strategy.
A)trigger strategy; threaten
B)trigger strategy; punish
C)legal maneuver; sue
D)tacit threat; dissuade

Question

Quizplus · Accepted Answer

In an indefinitely repeated game, a trigger strategy can be used to punish a rival that defects from a cooperative strategy. The trigger strategy involves a firm reacting to a deviation from the cooperative strategy by punishing the rival in the subsequent round, and continuing to do so as long as the rival deviates. This provides a credible threat that can deter the rival from defecting in the first place. Therefore, option B is the correct choice.

In an Indefinitely Repeated Game, a Firm Might Use a ________