1. Assume the payoff matrix for a game is as follows.
Firm B
X
Y
Firm A
1
6,6
14,2
2
2,14
9,9
What is the maximum interest rate at which collusion could occur between these firms
with a trigger strategy if the game is played an infinite number of times?
a. 25%
b. 35%
c. 50%
d. 60%
e. 65%
$\frac{14 - 9}{9 - 6} < \frac{1}{i}$
$1.67 < \frac{1}{i}$
$i < $