Consider the infinitely repeated game with following stage game. Player 2 A B C Player 1 A
Question:
Consider the infinitely repeated game with following stage game. Player 2 A B C Player 1 A 6, 6 1, 7 2, 8 B 7, 1 4, 4 1, 5 C 8, 2 5, 1 0, 0 (a) Describe the Grim Trigger strategy that supports the pair of actions (B, B) played in every period. (b) Find the conditions of so that (B, B) could be supported in a SPNE by the Grim Trigger strategy in (a). (Show that it is a SPNE by checking for one stage deviation in all types of histories.) (c) Describe the Limited Punishment strategy of 2 periods (LP-2) that supports the pair of actions (B, B) played in every period. (d) Find the conditions of so that (B, B) could be supported in a SPNE by the LP-2 in (C). For simplicity, you only need to consider the cases in t 3. (Show that it is a SPNE by checking for one stage deviation in all types of histories.)