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ctors) not Table 1 7-7 Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In

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ctors) not Table 1 7-7 Two companies, Acme and Pinnacle, each decide whether to produce a good quality product or a poor quality product. In the gure, the dollar amounts are payo's and they represent annual prots (in millions of dollars) for the two companies. Gooda] Poor Quality ME Refer to Table 17-7. Acme and Pinnacle agree to cooperate so as to maximize total prot. If this game is played repeatedly and Acme uses a tit-fortat strategy, it Will choose a Poor Quality O good quality product in the rst round and in subsequent rounds it will choose whatever Pinnacle chose in the previous round. 0 poor quality product in the first round and in subsequent rounds it will choose whatever Pinnacle chose in the previous round. 0 good quality product in all rounds, regardless of the choice made by Pinnacle. 0 poor quality product in all rounds, regardless of the choice made by Pinnacle

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