Though Nash games are noncooperative, a cooperative outcome is more likely if
A) long run gains are smaller than short run gains.
B) firms can easily monitor the outcomes from cooperation.
C) firms expect the market relationship to last only for a short time.
D) firms can easily monitor the outcomes from rival's defection.

Question

Quizplus · Accepted Answer

If firms can easily monitor the outcomes from cooperation, they are more likely to trust each other to follow through on their agreements and maintain a cooperative outcome. This reduces the likelihood of defection and improves the chances of achieving a cooperative solution in the Nash game.

Though Nash Games Are Noncooperative, a Cooperative Outcome Is More