If a prisoner's dilemma game is repeated daily, such that two rival stores choose a price simultaneously each morning for an extended number of days, which outcome can happen?
A) The Nash equilibrium will continue to be played throughout the game.
B) The Nash equilibrium will continue to be played only until one firm engages a trigger strategy against the other.
C) There will more likely be cooperation to achieve an outcome different from the Nash equilibrium that is better for both firms.
D) An outcome different from the Nash equilibrium would occur; however, only one firm will be better off.

Question

Quizplus · Accepted Answer

In repeated games like the prisoner's dilemma, firms can learn from previous interactions and may cooperate to achieve outcomes better for both, diverging from the Nash equilibrium to maximize their long-term benefits. This is because the threat of future retaliation for non-cooperative behavior can encourage cooperation.

If a Prisoner's Dilemma Game Is Repeated Daily, Such That