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The following game is repeated infinitely many times with a discount factor S. Player 2 Blue Red Player 1 Blue 15,15 5,20 Red 8,25 12, 14 When & is sufficiently close to 1: Let A denote the highest average payoff player 2 can receive in some SPE. Let B denote the lowest average payoff player 2 can receive in some SPE. Calculate A - B (A minus B) and enter the result in the box below. Please round your answer to 2 decimal places.

The following game is repeated infinitely many times with a discount factor S. Player 2 Blue Red Player 1 Blue 15,15 5,20 Red 8,25 12, 14 When & is sufficiently close to 1: Let A denote the highest average payoff player 2 can receive in some SPE. Let B denote the lowest average payoff player 2 can receive in some SPE. Calculate A - B (A minus B) and enter the result in the box below. Please round your answer to 2 decimal places.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The following game is repeated infinitely many times with a discount factor S. Player 2 Blue Red Player 1 Blue 15,15 5,20 Red 8,25 12, 14 When & is sufficiently close to 1: Let A denote the highest average payoff player 2 can receive in some SPE. Let B denote the lowest average payoff player 2 can receive in some SPE. Calculate A - B (A minus B) and enter the result in the box below. Please round your answer to 2 decimal places.
Transcribed Image Text:The following game is repeated infinitely many times with a discount factor S. Player 2 Blue Red Player 1 Blue 15,15 5,20 Red 8,25 12, 14 When & is sufficiently close to 1: Let A denote the highest average payoff player 2 can receive in some SPE. Let B denote the lowest average payoff player 2 can receive in some SPE. Calculate A - B (A minus B) and enter the result in the box below. Please round your answer to 2 decimal places.
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