Consider the repeated game in which the following stage game is played twice in succession, with payoffs averaged between the two rounds (and no discounting). f 0,0 d e а 4у, 4у b 0, 10 0,0 10,0 18, 18 48, 10 10, 48 40,40

Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
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Chapter13: Between Competition And Monopoly
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if Y =4

 

(b) What is the highest payoff any player can receive in any subgame perfect Nash equilibrium of the repeated game?

Consider the repeated game in which the following stage game is played twice in
succession, with payoffs averaged between the two rounds (and no discounting).
of
e
а 4у, 4y
0, 10
0,0
0,0
18, 18 48, 10
10, 48 40, 40
10,0
Transcribed Image Text:Consider the repeated game in which the following stage game is played twice in succession, with payoffs averaged between the two rounds (and no discounting). of e а 4у, 4y 0, 10 0,0 0,0 18, 18 48, 10 10, 48 40, 40 10,0
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