however, since i (firm 1) have also figured this out i also plan to charge a low price in the last month of course firm 2 can figure this out as well and therefore knows that i will charge a low price in the last month but then what about the next-to-last month ? because there will be no cooperation in the last month anyway firm 2 figures that it should undercut and charge a low price in the next-to-last month but of course i have figured this out too so i also plan to charge a low price in the next-to-last month and because the same reasoning applies to each preceding month the game unravels: the only rational outcome is for both of us to charge a low price every month