Duopoly pricing, grim trigger strategy, and tit-for-tat all promote cartel pricing by

Question

Quizplus · Accepted Answer

Duopoly pricing and tit-for-tat involve punishing the underpricer, while the grim trigger strategy involves permanently punishing any deviation from cartel pricing. Therefore, all three strategies aim to discourage underpricing and promote cartel pricing by penalizing those who deviate from the agreed-upon price. Option B is incorrect as none of these strategies make underpricing impossible, and option C is not necessarily true for all three strategies. Option D is not relevant to the question as it does not relate to promoting cartel pricing.

Duopoly Pricing, Grim Trigger Strategy, and Tit-For-Tat All Promote Cartel