10 Consider an infinitely repeated game where players play the static Prisoner's Dilemmagame in table 1 each period.Player 2CDC x, x | 0, yPlayer 1D y, 0 1,1Table 1: The GameSuppose 1 < x < y. Players have discount factor, 8. Suppose both players follow agrim trigger strategy. Find the conditions on d under which the strategies form a Nashequilibrium and cooperation is sustained in all periods. (I.e., find a condition on theplayer's patience such that players choose to cooperate in every period.)How does d depend on x? What happens as x → 1 or x → y. What is the intuitionbehind the results?

Given, Infinitely Repeated gameThere are two players : Player1 and Player2Both Players have two…

Answered: Consider an infinitely repeated game…

Business

Economics

Consider an infinitely repeated game where players play the static Prisoner's Dilemma game in table 1 each period.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.6P

See similar textbooks

Related questions

Q: Assume a bank has reserves of $21 million and demand deposits of $200 million. Legal Reserve…

A: Answers i) Total checking deposits=$200 million Refer to the given table Required Reserves…

Q: Illustrate and fully discuss the derivation of the demand curve for a perfectly competitive firm

A: Perfect Competition Conditions An economic examination of a company's production decisions considers…

Q: 4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The…

A: Quantity Total cost Marginal cost Fixed cost variable AVC ATC 0 120 --- 120 0 --- 1 200 80 120…

Q: Suppose Ming spends his entire income on two goods, X and Y, has "standard-looking" indifference…

A: Substitution effect The substitution effect is a theory of human consumption that shows consumers…

Q: 68. Supply-side economic studies indicate that a. Marginal income tax rates of about 20% start to…

A: Disclaimer: Since multiple questions have been posted, the answer to the first question is provided…

Q: 4.1 List and discuss the two (2) main instruments of fiscal policy. (14) 4.2 List and discuss two…

A: Answer (4.1): Fiscal policy: fiscal policy is implemented by the government by changing government…

Q: Airplane Tickets 400 350 300 250 200 150 100 D 50 25 50 75 100 125 A. Compute CS and PS surplus in a…

A: Total surplus is identified when we add consumer surplus and producer surplus in the market.

Q: 1. Consider the following game: not A (2,6) L R' L R' (0,1) (3,2) (-1,3)' (1,5) a) ^Write down the…

A: Given game form

Q: A series of cash flows are established on an account as listed below: Payment of P375 at the end of…

A: A lender charges a borrower an interest rate that is a percentage of the principal (the amount…

Q: Assume the market of non-medical masks can be described by the following equations: Demand: QD= 20 -…

A: Market equilibrium is that condition where market Demand is equal to market supply.

Q: Pizza Hut Total product Labor (workers) (pizzas produced per hour) 1 6. 12 14 15 Using the data in…

A: Evaluating the MP of the labor from TP.

Q: At high levels of disposable income Multiple Choice both the APC and APS are high.

A: Disposable income is income minus tax. ---------------------------------------------- Average…

Q: ade, the challenger will be depreciated with the straight line method over a 20-year life with an…

A: Given, Defender Challenger Initial cost 65000 70000 Operational cost 15000 9500 Market…

Q: An increase in government expenditure shifts the. curve to the Select one: Oa. LM/right b. LM/left…

A: IS curve shows the inverse relationship between interest rate and quantity. It means as the rate of…

Q: 24. Determine the present worth of a maintenance contract that has a cost of $30000 in year 1 and…

A: In economics and finance, present worth, conjointly brought up as present discounted worth, is that…

Q: You are given that the borrowing rate in the US is 10%. You expect the rupee to depreciate by 5%…

A: The depreciation means the fall in the value of the currency in an economy. It means as the money…

Q: If real GDP equals 7,000, nominal GDP equals 14,000, and the price level equals 2, then what is…

A: Answers Here, given information is, Nominal GDP (PY)= 14,000 Real GDP (Y)= 7,000 Price level…

Q: 16. A consumer's utility only depends on the consumption of goods A and B according to the following…

A: We have Utility function: U(A,B)=A1/5B4/5 .... (1) Price of good A = $5 Price of good…

Q: Why don’t wages measure the full return to labor? Why is human capital the most important factor of…

A: In humàn economy capital is the development of jobs created by education and knowledge, as well put…

Q: What are information rules? How do they simplify the process of making decisions?

A: Meaning of Economics: The term economics refers to the situation under which there remain…

Q: An increase in tariffs and quotas on imports causes a country's currency to appreciate.

A: Quotas are limits set on the number of commodities which will be imported during a particular period…

Q: 1. Consider the following normal-form game:

A: Since the question you have posted consists of multiple parts, we will answer the first two…

Q: To maximize its profit, a single - price monopoly the amount of output so that its marginal revenue…

A: For a single price monopoly we have downward slope demand curve.

Q: Under a marginal cost pricing rule, a natural monopoly makes zero economic profit incurs an economic…

A: For a natural monopoly we have downward sloping Average cost and when average cost is falling, AC is…

Q: To conduct an experiment, a movie theater increased movie ticket prices from $9 to $10 and measured…

A: We have an increase in price of movie tickets, an increase in price will leads to decrease in…

Q: 3.1 Every weekend more than 500 different vendors set up at the local farmers' market, selling a…

A: The monopolistic competition market is a type of market structure.

Q: What are leading economic indicators? Why are they important? In what way are these variables…

A: A macroeconomic gauge used by researchers to analyze current and future economic activity and…

Q: If the dollar rises in value against other currencies, this will Multiple Choice lower our trade…

A: Appreciation of currency refers to the increase in the value of one currency as compared to the…

Q: Price and cost (dollars per burger) 5.50- 5.00- MC АТС 4.50- 4.00- 3.50- 3.00- MR 2.50- 250 50 100…

Q: Cynthia is an Oklahoma wheat farmer. The demand for her wheat is A. perfectly inelastic. B. elastic…

A: A good's demand is inelastic when it is less than 1 And consider as elaticit it is more than 1.

Q: C. Suppose that for Q units of a certain product, the demand function is P = 200e010 cedis and the…

A: Given information Demand function P=200e-0.01Q Supply function P=(200Q+49)0.5

Q: pose a gated housing community includes 150 identical households. It is cos naintain the roads in…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subparts for you.…

Q: A wife and her husband choose to go to Bach or Stravinsky concert. Wife has incomplete information…

A: The first matrix when the husband is romantic is: P(R) = 2/3

Q: The demand and supply of corn are as follows: Qd = 2,100 - 125P Qs =…

A: Hi! Thank you for the question. As per the honor code, We’ll answer the first question since the…

Q: Determine the present equivalent value (PW at 0) of the following cash flow when the annual interest…

A: Present Worth is the value of a series of cash flows or the value of a lump-sum amount from the…

Q: Which of the following statements about money that is correct?

A: Money is not a proper stable store of value, its value erodes over time due to inflation. Credit…

Q: Why carbon offsets should not be allowed to be used in cap-and-trade markets?

A: Carbon offsets: Carbon offsets can be considered as making an investment in projects like investing…

Q: In an effort to curb the use of cigarettes, the US has utilized taxes to inhibit the purchase of…

A: Consumer surplus is that area which are lies below the demand curve and above the price level on the…

Q: The graph shows the cost curves, demand curve, and marginal revenue curve of a firm in monopolistic…

A: Monopolists would like to maximize the profit by producing at a unit where Marginal Revenue is equal…

Q: Mission Hotel has an average of 80 customers per hours arrive the front desk waiting have 5 to 7…

A: A cost basically refers to the amount of money that must be paid for anything. In other words, it is…

Q: According to the Descartes' rule, the number of positive i* value for the following cash flow is:…

A: Descartes' rule of signs is used for the determination of the number of real zeros in a polynomial…

Q: 1. Contrast what the Federal government tends to spend money on relative to state and local…

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: 1. In the basic Cournot model, both firms have constant marginal costs, c, and no fixed sts. Show…

A: We are given that, both the firms have constant marginal cost in the cournot model. i.e, MC = c and…

Q: consider the folloWing data on two fICtional countries: Tand Country 1 Country 2 Output per worker…

A: Country 1's output as a multiple of country 2's output = Country 1's output / Country 2's output

Q: For the above condition to hold, perfe mobility must be assumed and the domestic interest rate must…

A: The IS curve is downwards sloping to the right which indicates to the fact that the rate of…

Q: In May 2018, the quantity of base money is Canada was $84 billion and the M1+ money supply was $975…

A: Relationship among money supply, monetary base and money multiplier Money supply = Monetary base *…

Q: 1. If money has a time value, what do you think is the imoact of doing nothing with it (money)?\

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: 2nd attempt Which of the following are examples of fixed-proportions production functions? Choose…

A: When the inputs are consumed in the fixed proportion, then it is known as perfect complementary.

Q: QUESTION 4 Which game form is best suited to games with simultaneous decisions about strategy?…

A: In game theory, a simultaneous game or static game is a game where each player selects their action…

Question

Consider an infinitely repeated game where players play the static Prisoner's Dilemma
game in table 1 each period.
Player 2
C
D
C x, x | 0, y
Player 1
D y, 0 1,1
Table 1: The Game
Suppose 1 < x < y. Players have discount factor, 8. Suppose both players follow a
grim trigger strategy. Find the conditions on d under which the strategies form a Nash
equilibrium and cooperation is sustained in all periods. (I.e., find a condition on the
player's patience such that players choose to cooperate in every period.)
How does d depend on x? What happens as x → 1 or x → y. What is the intuition
behind the results?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider the following simultaneous game: Player 1 U D Player 2 L 30,10 -10, 20 R 10, 20 5,-10 Please indicate whether each of the following statements is true or false. Player 1 has a dominant strategy. This game has a Nash equilibrium. This game has a Nash equilibrium in pure strategies. Player 1's best response is D if player 2 plays R.
The following payoff matrix shows the possible sentence that two suspects , who are arrested on suspicion on car threft,could recieve. The suspects are intarogated seperately and are unable to communicate with one another. For the information given in the payoff matrix above: a. Is there a dominant strategy. b. What is the dominant strategy? How do you know? c. Is there a Nash equilibirium ? How do you know?
Consider the following game : Stag Rabbit Stag 9, 9 0, 8 Rabbit 8, 0 7, 7 The first payoff is that of player 1 and the second that of player 2. a. ) Draw the extensive form of the simultaneous game. Find all the Nash equilibrium. p. Suppose player 1 moves first or we are in a sequential game now. Draw the extensive form in the sequential version. c. What is the subgame perfect Nash Equilibrium (SPNE) in the sequential version? d. ) Explain why it is an SPNE.
For the friend-foe game, recall that there were 3 Nash equilibria possible, but the equilibria set didn't include the cooperative outcome, for which both players would win. Friend Foe Friend 500,500 0,1000 Foe 1000,0 0.0 a) If the game is played répeatedly. propose a play strategy that will enforce cooperation. For what valucs of o (discount factor) the equilibrium will be (Friend. Friend)?
Consider the following two player game: Player 1 ABCD X 1,2 4,1 5,2 2,3 Player 2 Y 2,2 3.5 1 4,4 0.4 Z 5.1 3,3 7,0 7,5 a. Find the strategies that survive iterated elimination of weakly and strictly dominated strategies. b. Find the best responses to each strategy and find all (pure strategy) Nash equilibria.
Consider the game of Chicken in which each player has the option to “get out of the way” and “hang tough” with payoffs: Get out of the way Hang tough Get out of the way 2,2 1,3 Hang tough 3,1 00 a. Find all pure strategy Nash equilibria, if they exist b. Let k be the probability that player 1 chooses “hang tough” and u be the probability that player two chooses “hang tough.” Find the mixed stragety Nash equilibria, if they exist
Consider the extensive form game portrayed below. The top number at aterminal node is player 1’s payoff, the middle number is player 2’s payoff,and the bottom number is player 3’s payoff.a. Derive the strategy set for each player. (Note: If you do not want to listall of the strategies, you can provide a general description of a player’sstrategy, give an example, and state how many strategies are in thestrategy set.)b. Derive all subgame perfect Nash equilibria. c. Derive a Nash equilibrium that is not a SPNE, and explain why it isnot a SPNE.
This payoff matrix shows a two-player variant of the sushi game, but where B really loves sushi, so her payoffs from getting to eat sushi are higher than A's, and her payoffs from there not being enough sushi are lower than A's. Payoffs are ordered A, B. В A 10, 15 10, 25 20, 15 0, -5 A. Find and state all of the mixed strategy Nash equilibria of the game. If there are multiple equilibria, number them in preparation for answering part "c." B. (From the week 6 lectures) Draw a graph of the expected payoffs for each player. Use these graphs to formulate the decision rule for each player. C. (From the week 6 lectures) Draw a graph of the best replies of the two players. Carefully label each Nash equilibrium.
Solve for the Nash equilibrium (or equilibria) in each of the following games. (a) The following two-by-two game is a little harder to solve since firm 2’spreferred strategy depends of what firm 1 does. But firm 1 has a dominantstrategy so this game has one Nash equilibrium. Firm 2 Launch Don’tFirm 1 Launch 60, -10 100, 0 Don’t 80, 30 120, 0 What is the Nash equilibrium of this simultaneous-move game? (b) What would the outcome of this game be if instead firm 1 moved first and then, after seeing what firm 1 chose, firm 2 chose it strategy? In this case firm 1 doesn’t necessarily need to choose a best response, but firm 2 must choose a best response since it moves second.
Consider this as a simultaneous-move (static) game: Player A Top Bottom Player B Left Right ETEL UU 1.b) Does any player have a dominant strategy in this game? Explain. 1.a) Write down the Best Response Correspondence for each of the two players. Molimonsbestich Quinit 1.c) Find all Nash Equilibria in pure strategies of this game. 1.d) Is there any Nash Equilibria in mixed strategies? If so, find it. Elekt
Player 1 U D L 3,3 5,0 Player 2 R 0,5 1,1 a. Find the Nash equilibria, if any, in the game above. For each equilibrium, justify why it is a Nash equilibrium in a few sentences. b. Suppose this game was to be played infinitely many times between the two players. Find a condition for 8 such that the Pareto-optimal outcome can be attained. Find this for both players playing Grim Trigger in the infinite game.
• (1,0) (1,1) Player 2 G D H (2,0) Action Player 1 Player 1 Action B Player 1 (3,-1) E Player 2 (0,1) (-1,-1) (a) Find all the Subgame Perfect Nash equilibria in this game. (b) Find all the Nash equilibria in this game. (Hint: write the game in strategic form.)