-Consider the pricing game depicted in Figure 5.5 in which payoffs are in millions of dollars. Suppose that this game is played repeatedly and the discount rate is 1 percent. What is the probability that the game will end if the players are indifferent between cooperating and defecting?
A) Around 1.3 percent.
B) Around 3.3 percent.
C) Around 5.3 percent.
D) Around 7.6 percent.
E) None of the above.

Question

-Consider the pricing game depicted in Figure 5.5 in which payoffs are in millions of dollars. Suppose that this game is played repeatedly and the discount rate is 1 percent. What is the probability that the game will end if the players are indifferent between cooperating and defecting?
A) Around 1.3 percent. 
B) Around 3.3 percent. 
C) Around 5.3 percent. 
D) Around 7.6 percent. 
E) None of the above.

Quizplus · Accepted Answer

The Answer of 
-Consider the pricing game depicted in Figure 5.5 in which payoffs are in millions of dollars. Suppose that this game is played repeatedly and the discount rate is 1 percent. What is the probability that the game will end if the players are indifferent between cooperating and defecting?
A) Around 1.3 percent. 
B) Around 3.3 percent. 
C) Around 5.3 percent. 
D) Around 7.6 percent. 
E) None of the above.

-Consider the Pricing Game Depicted in Figure 5