Suppose the following game is repeated once (that is, played twice in total). Bridget SB (10,...

 

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Suppose the following game is repeated once (that is, played twice in total). Bridget SB (10, 74) SA Alex S'A SA SB (70,70) (74, 10) (-10,-10) (40,40) (-10,-10) SB (-10,-10) (-10,-10) (50, 50) (a) How many strategies does Alex have? (b) Is there an SPNE where Alex and Bridget play (SA, SB) in the second iteration of the game? (c) Suppose they are about to play the game for the first time, and that they anticipate the outcome in the second round to be (50, 50) (associated to (s4, sg)) independently of which action they are about to play. Represent this situation as a strategic-form game. What are its NE? Is (SA, SB) one of them? Explain why or why not. (d) Can you think of a pair of strategies that would form an SPNE and have players pick (SA, SB) in the first iteration of the game? Explain why your suggested strategies form an SPNE. Suppose the following game is repeated once (that is, played twice in total). Bridget SB (10, 74) SA Alex S'A SA SB (70,70) (74, 10) (-10,-10) (40,40) (-10,-10) SB (-10,-10) (-10,-10) (50, 50) (a) How many strategies does Alex have? (b) Is there an SPNE where Alex and Bridget play (SA, SB) in the second iteration of the game? (c) Suppose they are about to play the game for the first time, and that they anticipate the outcome in the second round to be (50, 50) (associated to (s4, sg)) independently of which action they are about to play. Represent this situation as a strategic-form game. What are its NE? Is (SA, SB) one of them? Explain why or why not. (d) Can you think of a pair of strategies that would form an SPNE and have players pick (SA, SB) in the first iteration of the game? Explain why your suggested strategies form an SPNE.