Now the threat might be credible without any action after all you cannot be sure that an irrational manager will all way make a profit-maximizing decision. Tn gaming situation, the party that is knows(or thought) to be a little crazy can have a significant advantage.
Developing a reputation can be an especially important strategy in a repealed game. A firm might find it advantageous to behave irrationally for several plays of the game. This might give it a reputation that will allow it to increase its long run profits substantially.