Asked by Antoine Miquel on Jun 13, 2024
Verified
In game theory, credible threats can be used to maintain collusive agreements between firms.
Credible Threats
Statements or signs that a negative action could realistically be taken, used as a strategy in negotiations or competitive situations.
Collusive Agreements
Arrangements between firms to limit competition and manipulate markets in their favor, often through setting prices or controlling supply.
Game Theory
A mathematical framework used for analyzing situations in which parties make decisions that are interdependent, often used in economics, political science, and psychology to predict outcomes in strategic interactions.
- Comprehend the importance of collusion, behavior of cartels, and instances of cheating in the context of oligopolistic markets.
- Determine the elements that influence collusion and the durability of agreements among cartels.
Verified Answer
Learning Objectives
- Comprehend the importance of collusion, behavior of cartels, and instances of cheating in the context of oligopolistic markets.
- Determine the elements that influence collusion and the durability of agreements among cartels.
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