Question: Consider the stage game in Table 4. Table 4 Player 2 A B C A 5, 5 0, 0 12,0 Player 1 B 0, 0

 Consider the stage game in Table 4. Table 4 Player 2

Consider the stage game in Table 4. Table 4 Player 2 A B C A 5, 5 0, 0 12,0 Player 1 B 0, 0 2, 2 0,0 C 0,12 0,0 10,10 a) Assume first that the game is played only once. Find the Nash equilibria of the game. Which is the highest possible equilibrium payoff for each player? b) Assume now that the game is played twice and that the players are infinitely patient. Consider the following strategy for each player: "select C in the first round, if the other player selected C in the first round, select A in the second round and otherwise select B". Prove that this pair of strategies form a Nash equilibrium

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