Retaliation for Underpricing
Duopoly price: Jill also lowers price; abandons the idea of cartel profits, and settles for duopoly profits which are better than the profits when she is underpriced by Jack.
Grim Trigger: Jill drops her price to the level that will result in zero economic profit.
Tit-for-tat: Jill chooses whatever price Jack chose the preceding month.
Schemes to punish Jack if he underprices: