In repeated games,all of the following allow a firm to escape an inefficient "prisoners dilemma" equilibrium except
A)Be nice,don't strike first
B)Respond immediately to non-cooperation
C)Punish competitors as much as you can
D)Make sure your competitors can easily interpret your actions

Question

​In repeated games,all of the following allow a firm to escape an inefficient "prisoners dilemma" equilibrium except
A)​Be nice,don't strike first
B)Respond immediately to non-cooperation
C)Punish competitors as much as you can
D)​Make sure your competitors can easily interpret your actions

Quizplus · Accepted Answer

Punishing competitors as much as you can is not a strategy that allows a firm to escape an inefficient "prisoners dilemma" equilibrium. In fact, it may lead to a "tit-for-tat" strategy where both firms end up hurting each other and receiving lower payoffs. Instead, being nice and not striking first, responding immediately to non-cooperation, and making sure your competitors can easily interpret your actions can all help in escaping an inefficient equilibrium.

​In Repeated Games,all of the Following Allow a Firm to Escape

In Repeated Games,all of the Following Allow a Firm to Escape