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?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 1.2CE

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