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Consider an infinitely repeated game where two players have the same discount factor 5. The stage game is the following asymmetric Prisoner's Dilemma: C D
Consider an infinitely repeated game where two players have the same discount factor 5. The stage game is the following asymmetric Prisoner's Dilemma: C D C 3, 4 1, 6 D 4,0 2, 2 Consider the following "grim trigger" strategy profile: both players choose O in the first round. From the second round on, they choose O if no player ever played D before. Otherwise both players choose D. What is the lowest discount rate & for which this strategy profile is a SPNE? O 1/2 O 2/3 O 1/3 O 1/4 O 3/4
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