1. Consider a two-period repeated game in which the stage game shown below is played twice and the repeated-game payoffs are simply the sum of the payoffs in cach of the two periods. Show that there exists a unique subgame perfect Nash equilibrium in which the Nash equilibrium of the stage game is played in every period. Player 2 Y A 3,2 3,1 2,0 4, -4 в 1,3 4, 2 3,1 2.3 Player 1 0, 2 1, 3 9,8 0,9 -4,4 3, 2 10, 1 0,0

1. Consider a two-period repeated game in which the stage game shown below is played twice and the repeated-game payoffs are simply the sum of the payoffs in cach of the two periods. Show that there exists a unique subgame perfect Nash equilibrium in which the Nash equilibrium of the stage game is played in every period. Player 2 Y A 3,2 3,1 2,0 4, -4 в 1,3 4, 2 3,1 2.3 Player 1 0, 2 1, 3 9,8 0,9 -4,4 3, 2 10, 1 0,0

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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