Question: Please help me with part(c) [16 points] Two players, 1 and 2, play the following game repeatedly. The values in the table are the monetary
Please help me with part(c)
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[16 points] Two players, 1 and 2, play the following game repeatedly. The values in the table are the monetary rewards to the players for every possible combination of their actions. At any point in time, the actions taken by both players in the past (i.e. the history of play) are commonly known by both players. C D Player 2 C (2, 2) (0,3) D (3,0) (1, 1) Player 1 Here the first component is Player 1's reward and the second component is Player 2's reward. Both players want to maximize the discounted present value of their per-period rewards, with the same discount factor 5 = 0.9. In other words, if Player 1 receives a stream of monetary rewards (Xo,X1, X2, Xt, ...) over time, his lifetime payoff is U= X0+X1 5 + x; 5 2 + + xt 5 t+w Player 2 evaluates her lifetime payoff similarly. (c) Suppose the game is repeated indefinitely without end. Is there a Subgame Perfect Equilibrium of the repeated game in which Player 1 gets the lifetime payoff 3+0(0.9)+1(0.9)2+3(0.9)3+0(0.9)4+1(0.9)5 + . and Player 2 gets the lifetime payoff 0+3(0.9)+1(0.9)2+0(0.9)3+3(0.9)4+1(0.9)5 + . ? No (explain why not) / Yes (find a SPE strategy profile and justify your answer)
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