1) Consider the following game: Player 2 Left Player 1 2.2 6,0 a) If this game...
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1) Consider the following game: Player 2 Left Player 1 2.2 6,0 a) If this game is played one time, what is the pure strategy equilibrium? Up Middle Middle 0,6 1,1 b) If this game is played two times, what is the subgame perfect Nash equilibrium? c) Suppose the game is played infinitely many times, but the game could end in any particular round with probability 8 (or 8 is the discount rate, or both). Assume that both players are considering a Grim Trigger Strategy. What must the expected number of rounds of play be in order to sustain cooperation? What must the probability that the game ends be in order to sustain cooperation? Show your work! 1) Consider the following game: Player 2 Left Player 1 2.2 6,0 a) If this game is played one time, what is the pure strategy equilibrium? Up Middle Middle 0,6 1,1 b) If this game is played two times, what is the subgame perfect Nash equilibrium? c) Suppose the game is played infinitely many times, but the game could end in any particular round with probability 8 (or 8 is the discount rate, or both). Assume that both players are considering a Grim Trigger Strategy. What must the expected number of rounds of play be in order to sustain cooperation? What must the probability that the game ends be in order to sustain cooperation? Show your work!
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Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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