Why is collusion more likely in a repeated game?
What will be an ideal response?
First, a firm can signal other firms that it wishes to cooperate in one period, which could lead to collusion in subsequent periods. Second, a firm can punish a firm for not restricting output. The threat of punishment makes collusion more likely.
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The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation. B) increase uncertainty and the instability of total demand. C) secure short-term economic gains with deferred costs. D) result in all of the above. E) result in none of the above because they will usually want to be reelected.
A price floor in a perfectly competitive market
a. is efficient b. is a Pareto improvement c. is effective only if it is set below the equilibrium price d. transfers some surplus from consumers to producers e. transfers some surplus from producers to consumers
The productivity speed-up in the United States began in the
a. mid 1970s. b. mid 1980s. c. mid 1990s. d. beginning of 2001.
If nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be
A) equal to 100. B) greater than 100. C) less than 100. D) less than 0.