(Table: Firms A and B IX) Two firms have formed an agreement to restrict output. They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. The value of d (discount rate) = ____ would make Firm A indifferent between keeping the agreement or cheating on the agreement.

Question

(Table: Firms A and B IX) Two firms have formed an agreement to restrict output.  They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. The value of d (discount rate) = ____ would make Firm A indifferent between keeping the agreement or cheating on the agreement.

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The Answer of (Table: Firms A and B IX) Two firms have formed an agreement to restrict output.  They are playing an infinitely repeated game in which output decisions must be made every period. Both firms are using a grim trigger strategy. The value of d (discount rate) = ____ would make Firm A indifferent between keeping the agreement or cheating on the agreement.

(Table: Firms a and B IX) Two Firms Have Formed