A tit-for-tat strategy makes it possible for firms to cooperate without colluding.

Question

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A tit-for-tat strategy in business or game theory involves responding to a competitor's action with a similar action. This strategy can lead to cooperation as each firm mimics the other's cooperative or competitive behavior without the need for explicit collusion, thereby maintaining competitive market conditions while achieving mutually beneficial outcomes.

A Tit-For-Tat Strategy Makes It Possible for Firms to Cooperate