GMS 402 Chapter Notes - Chapter 10: Strategic Dominance, Extensive-Form Game, Tacit Collusion
16 Nov 2016
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In nitely repeated game: a game that is played over and over agin, and in which players receive playoffs during each play of the game. Disconnect between current decisions and future payoffs suggests that payoffs must be appropriately discounted. When a rm earns the same pro t in each period, over an in nite time horizon, the present value of the rm is: Trigger strategy: a strategy past play of a game and in which some particular past action triggers a different action by a player that is contingent on the. Fir m a & b meet and agree to the following arrangement: we will each charge the high price, provided neither of us has ever cheated" in the past. If one of them cheat the other player will punish by charging the low price in every period thereafter. It is easier to sustain collusive agreements via the punishment strategies outlined easier when rms know:
