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Two players with discount factor 0 < < 1 play the following stage game in each of an infinite number of periods. A B C
Two players with discount factor 0 < < 1 play the following stage game in each of an infinite number of periods.
A B C
A 20,20 2,5 60,0
B 5,2 3,3 19,5
C 0,60 5,19 25,25
Is the following statement TRUE / FALSE? Explain your answer. Discouraging result of the repeatedly played game is that, in every stage of the game, unique subgame perfect Nash equilibrium is chosen by both players, that is not Pareto optimal
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