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Use the following setting for questions 4-9. Consider the following static Prisoner's Dilemma game. For the following parts, suppose this game is played for innitely
Use the following setting for questions 4-9. Consider the following static Prisoner's Dilemma game. For the following parts, suppose this game is played for innitely many times with discount factor for both players 5 E [0,1). 8. Suppose 6 = 1/3. Before the game starts, you tell the players that you will offer each of them money m > 0 at each period both of them cooperate. The new per period payoff matrix is as follows: C 2+m,2+m -5,5l D 5,-5 0,0 At least how much should you oer to make the strategy described in part 7 a SPNE? (a) m 2 1 (b) m 2 1.75 (c) m 2 2.25 (d) m 2 3 (e) m 2 3.5
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