Question
Suppose the following stage game is repeated twice. Each players payo? is the discounted sum of the payo?s obtained in each period. P2 P2 P2
Suppose the following stage game is repeated twice. Each players payo? is the discounted sum of the payo?s obtained in each period.
| P2 | P2 | P2 | ||
| A | B | C | ||
| P1 | a | 0, 0 | 3, 4 | 6, 0 |
| P1 | b | 4, 3 | 0, 0 | 0, 0 |
| P1 | c | 0, 6 | 0, 0 | 5, 5 |
Let 
be the discount factor. Find the value of 
for which there exists a SPE (Subgame Perfect Equilibrium) in which the strategypro?le (c,C) is played in the ?rst period.
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Internal Quality Auditing
Authors: Denis Pronovost
1st Edition
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