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Consider the following repeated game involving possible collusion between two firms. In each stage game the two firms compete by choosing prices. Consumers view their
Consider the following repeated game involving possible collusion between two firms. In each stage game the two firms compete by choosing prices. Consumers view their products as perfect substitutes. Finally, both firms have an identical cost structure of TC(q)= cq +F. What is the threshold discount factor such that if < collusion is impossible but if collusion is possible?
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