Question
Its an Easy Question, Looks long but its not. please I need a solution URGENTLY Two players repeatedly play the following simultaneous move game for
Its an Easy Question, Looks long but its not. please I need a solution URGENTLY
Two players repeatedly play the following simultaneous move game for T periods.
Assume that both players observe all past actions and discount payos by (0, 1).
1/2 C D
A 5,5 -1,-2
B 6,-1 0,-3
(a) Find all subgame perfect equilibria of the game repeated for T = 1550 periods.
(b) Assume now that T = , so that the stage game is played an innite number of times.
For what values of does the following strategy prole, in which (A, C) is played along
the equilibrium path at every date, constitute a subgame perfect equilibrium?
The game is played in two states:
The actual game play starts in State I and then it continues to evolve as follows.
In State I, player 1 is supposed to choose action A and player 2 chooses C. If either player deviates from State I, play switches to State II.
In State II, player 1 is supposed to play B and player 2 should play D for a single period. If both players comply with these strategies, play reverts to State I in the next period. Otherwise, play continues in State II. (Players are stuck in State II until (B, D) is observed.
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