How can a prisoner's dilemma solution be overcome?
Game theory analysis shows that when oligopolistic firms play the game repeatedly, they can place penalties in the game that discourage future breakdowns in cooperation. When two oligopolistic firms believe they will only face each other once in competition, each has an incentive to cheat and try to take market share away from the competition. However, if oligopolistic firms believe they will have a long-term relationship, one that benefits from mutual cooperation, then violating the other firm's trust is likely to result in a long-term reduction in profits. Therefore, the cooperative arrangement is more likely to be maintained.
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Economic status tends to be passed on from one generation to the next _____
a. regardless of the monetary wealth that is transmitted from parents to children b. because of the monetary wealth that is transmitted from parents to children c. in nearly all societies d. a and c
Suppose that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________
A) 9 percent; 10 percent B) 10 percent; 9 percent C) 10 percent; 11 percent D) 11 percent; 10 percent
If the Fed were required to maintain an absolutely constant growth rate of high-powered money, then the growth rate of the money supply
A) would be zero. B) would be constant at the growth rate of H. C) would be constant but not necessarily at the growth rate of H. D) would fluctuate along with the parameters in the money-creation formula.
If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?
a. P = e/P b. 1 = e/P c. e = P/P d. None of the above is correct.