Use the following normal-form game to answer the questions below.
| Player 2 | |||
| Strategy | C | D | |
| Player 1 | A | 50, 50 | 120, 25 |
| B | 25, 120 | 55, 55 |
a. Identify the one-shot Nash equilibrium.
multiple choice 1
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(B,C)
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(B,D)
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(A,C)
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(A,D)
b. Suppose the players know this game will be repeated exactly three times. Can they achieve payoffs that are better than the one-shot Nash equilibrium?
multiple choice 2
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No
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Yes
c. Suppose this game is infinitely repeated and the interest rate is 6 percent. Can the players achieve payoffs that are better than the one-shot Nash equilibrium?
multiple choice 3
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No
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Yes
d. Suppose the players do not know exactly how many times this game will be repeated, but they do know that the probability the game will end after a given play is θ. If θ is sufficiently low, can players earn more than they could in the one-shot Nash equilibrium?
multiple choice 4
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Yes
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No
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