It is easier to sustain tacit collusion in an infinitely repeated game if:
A) the present value of cheating is lower than collusion.
B) there are many players.
C) the interest rate is higher.
D) the present value of cheating is lower than collusion and the interest rate is higher.

Question

Quizplus · Accepted Answer

In an infinitely repeated game, sustaining tacit collusion is easier when the present value of cheating is lower than the value of collusion, as players are more incentivized to maintain cooperation rather than cheat for short-term gains.

It Is Easier to Sustain Tacit Collusion in an Infinitely