Consider an infinitely repeated game in which the following game is played in every stage. Players discount future payoffs with a factor of 8. Player 1 Fight Hug Fight 2,2 19,40 Player 2 Hug 40, 19 30,30 If we want players to play (Hug. Hug) in every stage of a subgame perfect equilibrium outcome, what is the lowest possible discount factor 8? Round your answer to 2 decimal places.

Consider an infinitely repeated game in which the following game is played in every stage. Players discount future payoffs with a factor of 8. Player 1 Fight Hug Fight 2,2 19,40 Player 2 Hug 40, 19 30,30 If we want players to play (Hug. Hug) in every stage of a subgame perfect equilibrium outcome, what is the lowest possible discount factor 8? Round your answer to 2 decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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