If a prisoners' dilemma game is played repeatedly, what punishment strategies might the players employ and how does playing the game repeatedly change the equilibrium?
What will be an ideal response?
Two strategies for motivating compliance in a repeated prisoner's dilemma game are: i) a tit-for-tat strategy, where cheating by one firm in the current period is punished by the other firm cheating in the next period, but compliance by one firm in the current period is rewarded by compliance in the next period, ii) a trigger strategy, where cheating by one firm in the current period is punished by cheating by the other firm in all subsequent periods. Both strategies may create a cooperative equilibrium where all players share in the maximum possible benefit.
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Firm X owns both a grocery store and the parking lot outside the grocery store. In order to increase the traffic at the store it must
a. Decrease the prices on the goods sold in the store b. Decrease the parking rates c. All of the above d. None of the above
When the price of a good is $5, the quantity demanded is 120 units per month; when the price is $7, the quantity demanded is 100 units per month. Using the midpoint method, the price elasticity of demand is about
a. 0.55. b. 1.83. c. 2. d. 10.
Which of the following areas of study typifies microeconomics as opposed to macroeconomics?
a. the impact of minimum-wage laws on employment in the fast food industry b. the effect of changes in household saving rates on the growth rate of national income c. the impact of faster money growth on the rate of inflation d. a comparison of alternative tax policies and their respective impacts on the rate of the nation's economic growth
Assume the economy is operating at less than full employment. An expansionary monetary policy will cause interest rates to ________, which will ___________ investment spending
A. decrease; decrease B. decrease; increase C. increase; increase D. increase; decrease