n5 - ( M,M ) then play L . In the rst period, given that...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 405/505 Introduction to Game Theory Prof. Rui Zhao Repeated Games Stage game: L M R L (1, 1) (5, 0) (1, 0) M (0, 5) (4, 4) (0, 0) R (0, 1) (0, 0) (3, 3) There are two pure-strategy Nash: ( L,L ), ( R,R ). In the twice-repeated game, there is an SPE as follows: Each player i : plays M in the first period; if the first-period play was ( M,M ) then play R in the second period, if the first-period play is not
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ( M,M ) then play L . In the rst period, given that player 2 plays M , player 1s choices and corresponding total payos are as follows: chooses M , then payo = 4 + 3 =7; deviates from M to L then payo = 5 + 1 = 6; deviates from M to R then payo = 0 + 1 = 1. Clearly, players best action is M. 1...
View Full Document

This note was uploaded on 09/14/2011 for the course ECON 505 taught by Professor Zhao during the Spring '11 term at SUNY Albany.

Ask a homework question - tutors are online