Let's therefore explore a more forgiving super-strategy that may (or may not) suffice to ensure cooperation. Continue
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Let's therefore explore a more forgiving super-strategy that may (or may not) suffice to ensure cooperation. Continue to suppose the stage game is played an indefinite number of times. We want to find a threshold value of g for which there exists a subgame-perfect equilibrium in which both players play a trigger strategy where both charge a high price as long as no one deviates, but resort to tit-for-tat twice (that is, both charge a low price for two periods and go back to the high price forever after) if anyone were to deviates to Low.
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