Which of the following is FALSE for the grim trigger strategy and the infinite horizon repeated Prisoner's Dilemma game illustrated above? A. In the grim trigger strategy profile, if a player chooses D in a period, then both players chooses D forever after that period B. The threshold discount factor for sustaining cooperation under grim trigger strategy depends on the utility numbers in the stage game C. If all utility numbers remain the same but 3 is replaced by 5 in the stage game, then cooperation CANNOT be sustained in this game for all possible values of the discount factor.
Which of the following is FALSE for the grim trigger strategy and the infinite horizon repeated Prisoner's Dilemma game illustrated above? A. In the grim trigger strategy profile, if a player chooses D in a period, then both players chooses D forever after that period B. The threshold discount factor for sustaining cooperation under grim trigger strategy depends on the utility numbers in the stage game C. If all utility numbers remain the same but 3 is replaced by 5 in the stage game, then cooperation CANNOT be sustained in this game for all possible values of the discount factor.
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
Chapter20: The Problem Of Adverse Selection Moral Hazard
Section: Chapter Questions
Problem 3MC
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Which of the following is FALSE for the grim trigger strategy and the infinite horizon repeated Prisoner's Dilemma game illustrated above?
| A. |
In the grim trigger strategy profile, if a player chooses D in a period, then both players chooses D forever after that period |
|
| B. |
The threshold discount factor for sustaining cooperation under grim trigger strategy depends on the utility numbers in the stage game |
|
| C. |
If all utility numbers remain the same but 3 is replaced by 5 in the stage game, then cooperation CANNOT be sustained in this game for all possible values of the discount factor. |
Transcribed Image Text:C
2,2
с
D 3, -1
D
-1, 3
0,0
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