Part 1: Payment strings: Calculate the value of the following infinitely repeated string of payoffs.5 + 0.8*5 + 0.82*5 + 0.83*5 …10 + 0.5*6 + 0.52*10 + 0.53*6 …For a strategy in an infinitely repeated game, a player will get 20 each round. They have a discount rate of 0.75. What is their total utility for this strategy?For a strategy in an infinitely repeated game, a player will get 40 in the first round. After that, they alternate between getting 50 and getting 10. e. in the second round they get 50, in the third they get 10, in the fourth they get 50, in the fifth they get 10 and so on. They have a discount rate of 0.9. What is their total utility for this strategy?

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14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Part 1: Payment strings:

Calculate the value of the following infinitely repeated string of payoffs.

5 + 0.8*5 + 0.8²*5 + 0.8³*5 …
10 + 0.5*6 + 0.5²*10 + 0.5³*6 …
For a strategy in an infinitely repeated game, a player will get 20 each round. They have a discount rate of 0.75. What is their total utility for this strategy?
For a strategy in an infinitely repeated game, a player will get 40 in the first round. After that, they alternate between getting 50 and getting 10. e. in the second round they get 50, in the third they get 10, in the fourth they get 50, in the fifth they get 10 and so on. They have a discount rate of 0.9. What is their total utility for this strategy?

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