Question

In a repeated​ game, how does the outcome differ if firms know that the game will be​ (a) repeated​ indefinitely, (b) repeated a​ known, finite number of​ times, and​ (c) repeated a finite number of times but the firms are unsure as to which period will be the​ last?

Consider a game where the Nash equilibrium in a​ one-period static game is not the cooperative outcome​ (with collusion).

If the game is repeated​ indefinitely, then

A.cooperation can be achieved because the firms move sequentially.

B.cooperation cannot be achieved because of signaling.

C.cooperation cannot be achieved because the game has no payoffs.

D. cooperation cannot be achieved because threats are credible.

E.cooperation can be achieved with punishments for cheating

If the game is repeated a finite number of​ times, then

A. cooperation can be achieved because players can signal how to play each period.

B. cooperation can be achieved because players will not know each​ other's prior moves until the last period.

C. cooperation cannot be achieved because additional punishment cannot be imposed after the last period.

D. cooperation cannot be achieved because signaling cannot occur.

E. cooperation cannot be achieved because players cannot reason what will happen in successive periods.

If the game is repeated a finite number of times but the firms are unsure as to which period will be the​ last, then

A. cooperation cannot be achieved because signaling cannot occur.

B. cooperation cannot be achieved because punishments cannot be imposed after the last period.

C. cooperation can be achieved with signaling.

D.cooperation cannot be achieved because of punishments for cheating.

E. cooperation cannot be achieved because threats are credible.

Answer 1

1) If the game is repeated​ indefinitely, then

A.cooperation can be achieved because the firms move sequentially.

each player knows that he will be punished in next round if he doe not cooperate. Thus, he goes with cooperation strategy.

2)

If the game is repeated a finite number of​ times, then

C. cooperation cannot be achieved because additional punishment cannot be imposed after the last period.

Since game is repeated for finite number of times, thus there is lack of cooperation. Every ones know that player playing last game will be cheating other ones, thus cooperation can not be materialised here.

3)

If the game is repeated a finite number of times but the firms are unsure as to which period will be the​ last, then

C. cooperation can be achieved with signaling.

Cooperation can be achieved since both knows that he could be punished for cheating.