True or False: Based on the fact that both Gregor and Haidy increased production from the initial cartel quantity, you know that the output effect wa
larger than the price effect at that quantity.
False
Note that Gregor and Haidy sta a tit-for-tat strategy
words, Haidy’s output decisions a prisoners’ dilemma
a dowing
This behavior is an example of

In a tit-for-tat strategy, players start by cooperating and then mimic the opponent’s previous move, creating a delicate balance between competition and collaboration. This strategy works well in the context of repeated interactions, where the long-term relationship often leads to more favorable outcomes, such as increased production for both parties, rather than a one-off profit at the expense of the other.

In a prisoners’ dilemma scenario, both players have the incentive to betray the other for short-term gain, but if they both choose to cooperate instead, they end up better off. This illustrates the power of trust and reciprocity and highlights the importance of strategic thinking in collaboration, showing that sometimes working together can yield greater rewards.