Consider a repeated game with two players and two rounds. The stage game is shown below. Assume the players have a common discount factor õE (0, 1). Which of the following is NOT TRUE? L M L 3, 3 2, 1 12,0 M 1, 2 6, 6 0, 0 H 0, 12 0, 0 10, 10 O There is a SPNE where the two firms play (L, L) in the first period and (M,M) in the second period. O There are 2 pure strategy NE and 1 mixed strategy NE for the stage game. O If the stage game is repeated for 3 times instead of 2, then the minimum $ldelta$ such that there is a SPNE where (H,H) is played in the first round is smaller. O If payoff for (L,L) is (0,0), then there is no way to sustain (H,H) in the first period. O There doesn't exist any discount factor such that (H,H) will be played in the first period since the game is finite.
Consider a repeated game with two players and two rounds. The stage game is shown below. Assume the players have a common discount factor õE (0, 1). Which of the following is NOT TRUE? L M L 3, 3 2, 1 12,0 M 1, 2 6, 6 0, 0 H 0, 12 0, 0 10, 10 O There is a SPNE where the two firms play (L, L) in the first period and (M,M) in the second period. O There are 2 pure strategy NE and 1 mixed strategy NE for the stage game. O If the stage game is repeated for 3 times instead of 2, then the minimum $ldelta$ such that there is a SPNE where (H,H) is played in the first round is smaller. O If payoff for (L,L) is (0,0), then there is no way to sustain (H,H) in the first period. O There doesn't exist any discount factor such that (H,H) will be played in the first period since the game is finite.
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.9P
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3
![Consider a repeated game with two players and two rounds. The stage game is
shown below. Assume the players have a common discount factor õ E (0, 1). Which
of the following is NOT TRUE?
L
M
H
L
3, 3
2, 1
12, 0
M
1, 2
6, 6
0, 0
0, 12
0,0
10, 10
There is a SPNE where the two firms play (L, L) in the first period and (M,M) in the second
period.
There are 2 pure strategy NE and 1 mixed strategy NE for the stage game.
O If the stage game is repeated for 3 times instead of 2, then the minimum $ldelta$ such that
there is a SPNE where (H,H) is played in the first round is smaller.
O If payoff for (L,L) is (0,0), then there is no way to sustain (H,H) in the first period.
O There doesn't exist any discount factor such that (H,H) will be played in the first period since
the game is finite.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3513c3ec-1dce-49c2-8e7f-c2266150c41b%2F356d83c1-f5e8-453a-b323-535993f845a9%2Faf2zq6q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider a repeated game with two players and two rounds. The stage game is
shown below. Assume the players have a common discount factor õ E (0, 1). Which
of the following is NOT TRUE?
L
M
H
L
3, 3
2, 1
12, 0
M
1, 2
6, 6
0, 0
0, 12
0,0
10, 10
There is a SPNE where the two firms play (L, L) in the first period and (M,M) in the second
period.
There are 2 pure strategy NE and 1 mixed strategy NE for the stage game.
O If the stage game is repeated for 3 times instead of 2, then the minimum $ldelta$ such that
there is a SPNE where (H,H) is played in the first round is smaller.
O If payoff for (L,L) is (0,0), then there is no way to sustain (H,H) in the first period.
O There doesn't exist any discount factor such that (H,H) will be played in the first period since
the game is finite.
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