Why are cooperative agreements rare in markets with strategic interactions?
A)Players have incentives to disregard such agreements.
B)It is too hard to predict what other players will do.
C)There is little to gain because noncooperation yields the best possible outcome.
D)Cooperation entails higher costs.

Question

Quizplus · Accepted Answer

In markets with strategic interactions, players have incentives to disregard cooperative agreements because cooperation may not be in their own best interest, leading to a collective action problem.

Why Are Cooperative Agreements Rare in Markets with Strategic Interactions