2. Two players are engaged in a infinitely repeated game whose...

2. Two players are engaged in a infinitely repeated game whose stage game is shown below.

L R

U 4,4 1,2

D 5,1 0,4

a) Find all feasible individually rational payoffs.

b) Is payoff (4,4) possible in an SPE (assuming is sufficiently large)?

c) Can you suggest a simple trigger strategy achieving payoff (4,4)? (Hint: find NE of

the stage game and recall the weak perfect folk theorem.) What is the smallest value of

making this strategy possible?