Consider the following game played between the developed country (Player A) and the developing country (Player B). Player B Harness pollution Doesn't harness pollution (a) Find the Nash equilibrium of the game. Offer assistance 10, 8 8, 9 (b) Now, suppose the game is played an infinite number of times. Suppose the discount factor is 2/3 for both countries. Explain if grim strategies can sustain the outcome (offer assistance, harness pollution) emerging as a Nash equilibrium outcome every time the game is being played. Doesn't offer assistance 15,3 9,4

Consider the following game played between the developed country (Player A) and the developing country (Player B). Player B Harness pollution Doesn't harness pollution (a) Find the Nash equilibrium of the game. Offer assistance 10, 8 8, 9 (b) Now, suppose the game is played an infinite number of times. Suppose the discount factor is 2/3 for both countries. Explain if grim strategies can sustain the outcome (offer assistance, harness pollution) emerging as a Nash equilibrium outcome every time the game is being played. Doesn't offer assistance 15,3 9,4

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.9P

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What is the SPNE of the following game, where Player 1 moves first and can play A or B, and player 2 moves second and can play X or Y? Player 1 A B Player 2 Y 3,1 2, 3 1, 2 1, 2 >
The hand written is not allowed.
GAME UUU B1 Player B B2 A1 7,13 5, 10 A2 3,8 9,16 Player A A3 5,8 4,7 In Game UUU (see table above), assuming players move simultaneously, Player A choosing A1 and Player B choosing B3 is a Nash equilibrium. Player A choosing A3 and Player B choosing B2 is a Nash equilibrium. Both Player A choosing A1 and Player B choosing B1 and Player A choosing A2 and player B choosing B2 are Nash equilibria in pure strategies Player A choosing A1 and Player B choosing B2 is a Nash equilibrium.
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please ans the fourth part
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