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
shortlived consumer. each period dotsB and and The payoffs the two parties are given the following table, where
and
where Each consumer
date observes the actions the firm and previous consumers all previous periods,
dots, Show that there exists a subgame perfect equilibrium where the firm provides
high quality, large enough. : construct a trigger strategy equilibrium
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