(Table: Firms A and B X) 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 grim trigger strategies.
If d (discount rate) = 0.80, Firm B's expected payoff from cheating on the agreement is ____.
A) 505
B) 500
C) 470
D) 430

Question

(Table: Firms A and B X) 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 grim trigger strategies.
If d (discount rate) = 0.80, Firm B's expected payoff from cheating on the agreement is ____.
A) 505 
B) 500 
C) 470 
D) 430

Quizplus · Accepted Answer

The Answer of (Table: Firms A and B X) 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 grim trigger strategies.
If d (discount rate) = 0.80, Firm B's expected payoff from cheating on the agreement is ____.
A) 505 
B) 500 
C) 470 
D) 430

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