Grim Trigger Strategy
A strategy in repeated games where a player cooperates until the opponent defects once, after which the player defects forever as a punishment.
Implications
A strategy in game theory where a player cooperates until the other player defects, after which the first player retaliates by choosing the worst possible outcome for the defector indefinitely, often used to enforce cooperation in repeated games.
Example
Example: In a price-fixing agreement, two companies adhere to a grim trigger strategy by maintaining high prices until one cheats; if cheating occurs, the other responds with a price war that continues indefinitely.
Related Terms
Different from tit-for-tat, which responds to defection with temporary retaliation, grim trigger strategy imposes permanent punishment, making it a harsher enforcement mechanism.
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