MCQ Q30*Consider the stage game shown in Table "SPNE in a repeated game". Suppose this game is played twice. What are the minimumvalues of 8₁ and 62 that are needed to support the play of a3, b2 in the first stage as part of an SPNE?Table: SPNE in a repeated game2b₁b₂b:3a1(10,10)(2,12)(0,13)102(12,2)(5,5)(0,0)az(13,0)(0,0)(1,1)1) Play of a3, b2 in the first stage cannot be supported as part of an SPNE for any 6₁ and 62 values between 0 and 1.2) 6₁ ≥ 1/4 and 6₂ ≥ 1/2.3) 1 1/2 and 62 ≥ 1/4.4) 81 ≥ 0 and 62 ≥ 1/4.5) None of the above.

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Consider the stage game shown in Table “SPNE in a repeated game". Suppose this game is played twice. What are the minimum values of d1 and 82 that are needed to support the play of a3, b2 in the first stage as part of an SPNE? Table: SPNE in a repeated game

Consider the stage game shown in Table “SPNE in a repeated game". Suppose this game is played twice. What are the minimum values of d1 and 82 that are needed to support the play of a3, b2 in the first stage as part of an SPNE? Table: SPNE in a repeated game

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 5MC

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Question

MCQ

Q30*
Consider the stage game shown in Table "SPNE in a repeated game". Suppose this game is played twice. What are the minimum
values of 8₁ and 62 that are needed to support the play of a3, b2 in the first stage as part of an SPNE?
Table: SPNE in a repeated game
2
b₁
b₂
b:3
a1
(10,10)
(2,12)
(0,13)
1
02
(12,2)
(5,5)
(0,0)
az
(13,0)
(0,0)
(1,1)
1) Play of a3, b2 in the first stage cannot be supported as part of an SPNE for any 6₁ and 62 values between 0 and 1.
2) 6₁ ≥ 1/4 and 6₂ ≥ 1/2.
3) 1 1/2 and 62 ≥ 1/4.
4) 81 ≥ 0 and 62 ≥ 1/4.
5) None of the above.

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