Consider the following game in normal form. Player 2 L N Player A 8,11 0,0 1 B9,-1 0.5,5 Assume that the game will be repeated infinitely many times, and that player 2 is playing a grim trigger strategy. That is, he starts in the first period with L and plays L as long as player 1 does not deviate from A: If player 1 deviates from A, i.e., if player 1 plays B, player 2 chooses N in the next period and all future periods. How large needs to be, such that player 1 has no incentive to depart from A in the first period? 062/1/1/00 082 / 0. 062 1/1/000 062/1 None of the answers is correct.
Consider the following game in normal form. Player 2 L N Player A 8,11 0,0 1 B9,-1 0.5,5 Assume that the game will be repeated infinitely many times, and that player 2 is playing a grim trigger strategy. That is, he starts in the first period with L and plays L as long as player 1 does not deviate from A: If player 1 deviates from A, i.e., if player 1 plays B, player 2 chooses N in the next period and all future periods. How large needs to be, such that player 1 has no incentive to depart from A in the first period? 062/1/1/00 082 / 0. 062 1/1/000 062/1 None of the answers is correct.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Consider the following game in normal form.
Player 2
L
N
Player A 8,11 0,0
1 B 9,-1 0.5,5
Assume that the game will be repeated infinitely many times, and that
player 2 is playing a grim trigger strategy. That is, he starts in the first
period with L and plays L as long as player 1 does not deviate from A: If
player 1 deviates from A, i.e., if player 1 plays B, player 2 chooses N in
the next period and all future periods. How large needs to be, such that
player 1 has no incentive to depart from A in the first period?
062 1/1/1/00
0629/0.
0821/16
0621
68
None of the answers is correct.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd55788f6-e8c1-4413-8803-24c52e6d1126%2Fbb8a3976-a363-4648-836b-632d776388c6%2Fdcllquj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider the following game in normal form.
Player 2
L
N
Player A 8,11 0,0
1 B 9,-1 0.5,5
Assume that the game will be repeated infinitely many times, and that
player 2 is playing a grim trigger strategy. That is, he starts in the first
period with L and plays L as long as player 1 does not deviate from A: If
player 1 deviates from A, i.e., if player 1 plays B, player 2 chooses N in
the next period and all future periods. How large needs to be, such that
player 1 has no incentive to depart from A in the first period?
062 1/1/1/00
0629/0.
0821/16
0621
68
None of the answers is correct.
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