Question: Consider the following interaction between a single long lived firm, and a sequence o f short - lived consumer. I n each period t =

Consider the following interaction between a single long lived firm, and a sequence
of short-lived consumer. In each period t=1,2dotsB and NH and L. The payoffs to the two parties are given by the following table, where
vH>p>vL and p>cH>cL.
a, where 01. Each consumer at
date t observes the actions of the firm and of previous consumers in all previous periods,
1,2dots,t-1. Show that there exists a subgame perfect equilibrium where the firm provides
high quality, ifis large enough. (Hint: construct a trigger strategy equilibrium).
Consider the following interaction between a

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