Question

Which of the following is true? Multiple Choice All of the statements associated with this question are correct. In a finitely repeated game with a certain end period, collusion is unlikely because effective punishments cannot be used during any time period. In an infinitely repeated game, collusion is always a Nash equilibrium. None of the answers is correct.

Answer 1

The correct answer is In a finitely repeated game with a certain end period, collusion is unlikely because effective punishments cannot be used during any time period.

Explanation: The point is much more general than the specific game of the prisoners' dilemma. Any static game in which there is a situation that both are better, but it is not balance, and a situation in which both are worse but it is balance.