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Consider the following stage game: L C R. T 2, 1 6,0 0,0 M 0, 5 4.4 1, 1 B 1,0 2.0 3, 214. Noe.Ir
Consider the following stage game: L C R. T 2, 1 6,0 0,0 M 0, 5 4.4 1, 1 B 1,0 2.0 3, 214. Noe.Ir suppose that the same stage game from the previous questions is repeated in- niter many times. The players have a common discount rate 6 such that O S. 5 E 1. Consider the following strategy for the game: 0 Player 1: Play M in the initial period; in subsequent periods, keep playing M as long as (M, C} was the outcome in every previous period; otherwise, play B. 9 Player 2: Play C in the initial period; in subsequent periods, keep playing C as long as (M, C} was the outcome in every previous period; otherwise, play R. What is the range of discount factors that can sustain this strategy as a Subgame Perfect Nash Equilibrium
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