Which of the following is true?
A) In an infinitely repeated game, collusion is always a Nash equilibrium.
B) In a finitely repeated game with a certain end period, collusion is unlikely because effective punishments cannot be used during any time period.
C) All of the statements associated with this question are correct.
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

In a finitely repeated game, collusion is less likely because there is a set end period, which means that effective punishments cannot be used during any time period. Therefore, players may defect in later rounds without fear of retaliation. In contrast, in an infinitely repeated game, players have a greater incentive to maintain collusive behavior because there is no clear end point. Thus, option A is incorrect. Option C is also incorrect because not all statements in the question are correct. Option D is incorrect because there is at least one correct answer.

Which of the Following Is True