1. Consider the following game in normal form.

	Not cooperate	Cooperate
Not cooperate	20,20	50,0
Cooperate	0,50	40,40

• What is Nash equilibrium? Is it efficient? Why?
• What needs to be complied with so that the players would like to cooperate? What happens when one of the players does not cooperate? Why? Define trigger strategy.
• Calculate the discount factor (δ) that would make both players decide to cooperate.