4 Question 3Think of a repeated game where the following game G has been played twice. Find out thePareto dominant Sub-game Perfect outcome. Provide in detail about the procedures youundertake to get the equilibrium/Equilibria. Does proposition 2 apply in the game? Explain.C2|(3,0)-(3,1)(4,4)A2B2|(3,1)-(2,1)-|(1,2)-(0,0)-(1,2)-(0,1)е Proposition 2If G is a static game of complete information with multiple NE then theremay be a subgame perfect outcomes of the repeated game G(T) in which forany t

Sub-game Perfect Nash Equilibrium (SPNE) is a concept used in the evaluation of repeated video…

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Question

Proposition 2
If G is a static game of complete information with multiple NE then there
may be a subgame perfect outcomes of the repeated game G(T) in which for
any t<T, the outcome in the stage t is not a NE of G.

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Step 1: Define Sub-game Perfect Nash Equilibrium

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Step 2: Explain the Pareto dominant Sub-game Perfect outcome.

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Step 3: Explain the Proposition 2

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