Use the following normal-form game to answer the questions below.

Use the following normal-form game to answer the questions below.

Player 2
Strategy C D
Player 1 A 30, 30 80, 20
B 20, 80 45, 45

a. Identify the one-shot Nash equilibrium.

(Click to select)(A,C)(B,D)(B,C)(A,D)

b. Suppose the players know this game will be repeated exactly three times. Can they achieve payoffs that are better than the one-shot Nash equilibrium?

(Click to select)NoYes

c. Suppose this game is infinitely repeated and the interest rate is 6 percent. Can the players achieve payoffs that are better than the one-shot Nash equilibrium?

(Click to select)YesNo

d. Suppose the players do not know exactly how many times this game will be repeated, but they do know that the probability the game will end after a given play is θ. If θ is sufficiently low, can players earn more than they could in the one-shot Nash equilibrium?

 

 

 

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