A finitely repeated game differs from an infinitely repeated game in that:
A) The former needs a lower interest rate to support collusion than the latter needs.
B) There is an end-of-period problem for the former.
C) A collusive outcome can usually be sustained in the former but not the latter.
D) All of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

In a finitely repeated game, players know when the game will end, leading to an end-of-period problem where cooperation is harder to sustain as the end approaches. In contrast, infinitely repeated games can support collusion through strategies like trigger strategies.

A Finitely Repeated Game Differs from an Infinitely Repeated Game