8 - round of a two period game and there is no discounting...

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ECON 3600 Assignment 8. Due Thursday, March 29th. 1. War of Attrition. (From Yale Open Course) In the two-stage war of attrition we studied in class, we focused on the case where v > c. For the converse case, c > v, find all the sub-game perfect equilibria, pure and mixed, including equilibria in which players mix in the first stage but do not mix in the second. [Hint: be careful when calculating the mixing probabilities to take into account of what will happen in stage 2]. 2. Repeated Game: Consider a repeated game in which the stage game in the following figure is played in each
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Unformatted text preview: round of a two period game and there is no discounting. L M R U 8,8 0,9 0,0 C 9,0 0,0 3,1 D 0,0 1,3 3,3 Fully describe a subgame perfect equilibrium in which the players select (U,L) in the first period. 3. Infinitely Repeated Game: Find the conditions on the discount factor, δ , under which cooperation (C) can be supported in the following infinitely repeated game using the Grim Trigger strategy: C D C 3,4 0,7 D 5,0 1,2...
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