Two farmers, Ali and Hasan, graze their animals on a common land. They can choose to use the common resource lightly or heavily and the resulting strategic interaction may be described as a strategic form game. The payoff matrix is the following:  (The table is attached on iamges part) Suppose that the game is repeated infinitely. If both players play a Grim-Trigger strategy, find the discount factor δ such that (Light,Light) be a Nash equilibrium

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Two farmers, Ali and Hasan, graze their animals on a common land. They can
choose to use the common resource lightly or heavily and the resulting strategic interaction
may be described as a strategic form game. The payoff matrix is the following: 

(The table is attached on iamges part) Suppose that the game is repeated infinitely. If both players play a Grim-Trigger strategy, find
the discount factor δ such that (Light,Light) be a Nash equilibrium

Hasan
Light
Ali Light 40, 40
Heavy
20, 55
Heavy
55, 20
30,30
Transcribed Image Text:Hasan Light Ali Light 40, 40 Heavy 20, 55 Heavy 55, 20 30,30
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