In a setting of repeated competition
A) The cooperative outcome is the repetition in each period of the Nash equilibrium outcome that would arise were the firms to compete just once
B) The noncooperative outcome is the repetition in each period of the Nash equilibrium outcome that would arise were the firms to compete just once
C) The noncooperative outcome is the Nash equilibrium that arises only after firms compete many times
D) The cooperative outcome is the Nash equilibrium that arises after firms compete many times

Question

Quizplus · Accepted Answer

In a setting of repeated competition, the noncooperative outcome is the repetition in each period of the Nash equilibrium outcome that would arise were the firms to compete just once. This means that firms are not cooperating and making joint decisions, but rather continuing to compete in each period based on the same strategic considerations as in the one-shot game.

In a Setting of Repeated Competition