What incentive function do co-payments and deductibles play for insurance coverage?
How might high overtime pay discourage productivity?
In an iterated prisoner’s dilemma game, one may decide to punish an opponent who has defected by responding with defection for a certain number of rounds, then reverting to cooperation. This strategy would result in the punished player losing, say, $x each round (starting next round) for n rounds. Show that the present value of the money lost is (? – ?n + 1) x/(1 – ?)
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