Each, therefore is confident the other won't fink. IT encourages an infinite horizon, in that it enables an organizational memory that transcends individuals' tenures with individual firms. Firms' reputations are maintained in the corporate memory. IT also enables mutual monitoring of performance. To signal their intention not to fink, producers limit the set of suppliers, thus improving the suppliers' bargaining positions with respect to profit allocation, and guaranteeing adequate return on suppliers' investment.
Fewer suppliers can thus bargain for a larger piece of a larger pie.
They portray the game as a finite prisoners' dilemma played by two suppliers, each of whom will fink every time, which is to the retailer's advantage. My point is that the supplier should be forming a strategic alliance with his customer, in which they both win. In this infinite game, neither player has an incentive to unilaterally fink, because he would be worse off. Each participant is better off in this arrangement than in any other. Participants would have a continuing relationship, trust, partnership.