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Again consider the game: Firm B Action Low Price High Price Firm A Low Price 0,0 40,-30 High Price -30,40 10,10 O 50% O 100% O 25% O 33.3% The game is repeated but with a chance that the game will end after any given period. If the interest rate is zero, what is the maximimum chance the game ends after a given period where a trigger strategy can sustain collusion?

Again consider the game: Firm B Action Low Price High Price Firm A Low Price 0,0 40,-30 High Price -30,40 10,10 O 50% O 100% O 25% O 33.3% The game is repeated but with a chance that the game will end after any given period. If the interest rate is zero, what is the maximimum chance the game ends after a given period where a trigger strategy can sustain collusion?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Again consider the game: Firm A Low Price 0,0 50% 100% 25% Firm B Action Low Price High Price 33.3% The game is repeated but with a chance that the game will end after any given period. If the interest rate is zero, what is the maximimum chance the game ends after a given period where a trigger strategy can sustain collusion? High Price -30,40 40,-30 10,10
Transcribed Image Text:Again consider the game: Firm A Low Price 0,0 50% 100% 25% Firm B Action Low Price High Price 33.3% The game is repeated but with a chance that the game will end after any given period. If the interest rate is zero, what is the maximimum chance the game ends after a given period where a trigger strategy can sustain collusion? High Price -30,40 40,-30 10,10
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