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Consider the prisoner's dilemma game below: X Y A 8,8 0,10 B 10,0 1,1 Throughout this question assume that there is a per-period discount rate
Consider the prisoner's dilemma game below:
X | Y | |
A | 8,8 | 0,10 |
B | 10,0 | 1,1 |
Throughout this question assume that there is a per-period discount rate d, 0 a) If this stage game is repeated 10 times there is a unique SPNE of the repeated game. Describe the strategy of each player in the SPNE. b) Now suppose that the stage game is infinitely repeated. What level of d can support a simple trigger strategy as a SPNE?
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