Principles of Microeconomics / Unit 9 MIC 0830 short lesson, about 20 seconds
Repeated Games: Tit-for-Tat and Triggers
Captions available
The idea
Real oligopolies play repeatedly. A firm can answer cheating with cheating and cooperation with cooperation, tit-for-tat, or threaten a permanent price war, a trigger strategy. Either can hold a tacit cartel.
In practice
A rival who knows every cut will be matched has less reason to cut.
Where people slip
Repetition makes cooperation possible, not certain; the one-shot logic returns when the game is expected to end.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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