-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?
A) $84 million.
B) $140 million.
C) $168 million.
D) $182 million.
E) None of the above.

Question

-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?
A) $84 million. 
B) $140 million. 
C) $168 million. 
D) $182 million. 
E) None of the above.

Quizplus · Accepted Answer

The Answer of 
-Consider the oil-drilling game depicted in Figure 4.2 in which the payoffs are in millionsof dollars. Suppose that the discount rate is 40 percent and this game is infinitely repeated. What is the present value of the stream of payoffs by cooperating?
A) $84 million. 
B) $140 million. 
C) $168 million. 
D) $182 million. 
E) None of the above.

-Consider the Oil-Drilling Game Depicted in Figure 4