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Exercise 2. Suppose that player 1 and player 2 participate in an infinitely repeated game, where the stage game is shown below. As in Exercise

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Exercise 2. Suppose that player 1 and player 2 participate in an infinitely repeated game, where the stage game is shown below. As in Exercise 1, the payoff for each player is a discounted sum of the payoffs for each stage, with discount factor 0 0 such that the strategy profile (o, a) is a Nash equilibrium of the repeated game whenever the discount rate o > do

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