A finitely repeated game differs from an infinitely repeated game in that:
A) the former needs a lower interest rate to support collusion than the latter needs.
B) there is an end-of-period problem for the former.
C) a collusive outcome can usually be sustained in the former but not the latter.
D) All of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

In a finitely repeated game, players know when the game will end, which leads to an end-of-period problem where players have an incentive to deviate from a cooperative strategy in the final period. This problem does not exist in infinitely repeated games because there is no final period.

A Finitely Repeated Game Differs from an Infinitely Repeated Game