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5. Suppose A and B are two multinational soda companies operating in Venezuela. The table below lists the payoffs (quarterly profit, in millions of dollars)
5. Suppose A and B are two multinational soda companies operating in Venezuela. The table below lists the payoffs (quarterly profit, in millions of dollars) for each firm as a function of their decision to advertise in this market: B advertises does not advertise A advertises 6.8, 5.7 9.8, 5.4 does not advertise 6.4, 7.2 7.2, 6.8 b) Analyze whether a tit-for-tat strategy makes cooperation sustainable in this game or not: for what values of the discount factor () will it be possible to have both companies maintain the "cooperating outcome" if they both employ a tit-for-tat strategy? Explain
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