ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Use the following normal-form game to answer the following question.

 

 

 

Player 2

 

Player 1

Strategy

C

D

 

A

30,30

70,0

 

B

0,70

60,60

 

  1. Identify the one-shot equilibrium
  2. Suppose the players know this game will be repeated three times. Can they achieve payoffs that are better than the one-shot game Nash Equilibrium? Explain.
  3. Suppose the game is infinitely repeated and the interest rate is 6%. Can the player achieve payoffs that are better than the one-shot game equilibrium? Explain.
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