Suppose d = 1/4. 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 D C 2+m, 2+m 3, -3 D -3, 3 1, 1 At least how much should you offer to make the strategy described in part 6 a SPNE? (a) m≥ 1/15 (b) m≥ 0.2

Suppose d = 1/4. 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 D C 2+m, 2+m 3, -3 D -3, 3 1, 1 At least how much should you offer to make the strategy described in part 6 a SPNE? (a) m≥ 1/15 (b) m≥ 0.2

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 17P

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