Refer to the following normal form game of price competition question

-Suppose this is a repeated game where the firms adopt a trigger strategy.What would the trigger strategy look like?
A)Charge low prices until he charges a high price,and then match
B)Charge high prices until he charges a low price,then match
C)Charge a high price till he charges a high price,then charge a low price
D)Charge a low price till he charges a low price,then charge a high price

Question

​Refer to the following normal form game of price competition question
 
-​Suppose this is a repeated game where the firms adopt a trigger strategy.What would the trigger strategy look like?
A)​Charge low prices until he charges a high price,and then match 
B)Charge high prices until he charges a low price,then match 
C)Charge a high price till he charges a high price,then charge a low price 
D)​Charge a low price till he charges a low price,then charge a high price

Quizplus · Accepted Answer

In a trigger strategy, the player follows a certain strategy until the opponent deviates from the agreed strategy, triggering a new strategy. In this game, the best trigger strategy for both firms would be to charge high prices until the other firm charges a low price, and then match that low price. This is because charging a low price when the other firm is charging a high price would result in a low payoff, as both firms would be undercutting each other and lowering their profits. Hence, the firms would prefer to charge high prices until the other firm deviates, triggering a new strategy of matching the low price.

​Refer to the Following Normal Form Game of Price Competition

Refer to the Following Normal Form Game of Price Competition