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It Is Easier to Sustain a Collusive Agreement in an Infinitely

Question 34

Multiple Choice

It is easier to sustain a collusive agreement in an infinitely repeated game if:
I. The present value of the stream of payoffs from cooperating is higher.
II. The discount rate is higher.
III. The present value of violating the agreement is lower.
Which of the following is correct?


A) I only.
B) II only.
C) III only.
D) I and II only.
E) I and III only.

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