Question 3 and 4

Consider an infinitely repeated game described by the following matrix: 1. Identify the pure strategies Nash equilibrium of this game. 2. Suppose that player 1 believes that the outcome of this game will be unfavourable to him (her). Therefore, this player wants to achieve an outcome that is not a Nash equilibrium in the stage game. Which outcome would that be? 3. Given your previous answers, and assuming that players have a discount factor equal to 6, state when a Grim strategy would work, i.e., for which values of 6 would this strategy be effective? 4, Assume now that player 1 does not want to be so harsh with player 2, and decides to change the strategy by punishing player 2 for only one period. Redo your calculations to find the value of 6 for which player 1 could adopt this strategy successfully