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2. Suppose that the following game is repeated infinitely by the same two players. Each time, they observe how it was played previously before
2. Suppose that the following game is repeated infinitely by the same two players. Each time, they observe how it was played previously before playing it again. Player 2 A B Player 1 5, 5 12, 2 2, 12 3, 3 B Suppose that each player has a discount factor of 0.9. Is it a subgame perfect Nash equilibrium for each player to play the following strategy? Show your work and explain your answer. In the first period, play A. In subsequent periods, play A provided (A,A) has been played in all previous periods. Otherwise, play B.
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