Trigger strategy - self sustainable, Microeconomics

Assignment Help:

Consider an infinitely repeated prisoner's dilemma game by two players. The resultant payoffs at each stage by the actions of two players are given below in the table (payoffs are denoted like (payoff for player 1, payoff for player 2)). Two players determine their strategies simultaneously and independently to maximize expected payoffs of their own based on their information. The game is potentially infinitely repeated, however, the game ends at a probability of 1-x (0≤1-x≤1) in every stage (that is, these players continue to play this game at the probability of x). There is no discount rate for future payoffs (i.e. both players weight current and future payoffs equally).

 

player 2

C

D

player 1

C

(9,9)

(1,13)

D

(13,1)

(3,3)

 

(a) Suppose two players adopt a Trigger Strategy (Play C in the first stage. In the tth stage (t≥2), if the outcome of all t-1 preceding stages has been (9, 9), then play C; otherwise, play D). Find the range of x which makes cooperation self-sustainable.

(b) Suppose two players adopt a Tit for Tat Strategy (TFT) (Play C in the first stage. And then, do whatever the other player did at the previous stage). Find the range of x which makes cooperation self-sustainable.


Related Discussions:- Trigger strategy - self sustainable

Market Structures, Using the key distinguishing features of any market stru...

Using the key distinguishing features of any market structure describe the market structure for the South African mobile telecommunications industry

Economies of scale, Economies of Scale The reduction in the cost of ea...

Economies of Scale The reduction in the cost of each additional unit produced as all factors of production increase. Factors contributing to economies of scale include discoun

Ricardian model - production possibilities frontier, Suppose there are two ...

Suppose there are two countries (home and foreign) and that two goods can be produced within those countries: machinery (M) and bread (B). Marginal product of labor (MPL) is given

Rational producer, In the context of managerial economics how do you explai...

In the context of managerial economics how do you explain a rational producer. Illustrate giving example covering different dimention.

Floating exchange rates, Floating exchange rates There are two basic s...

Floating exchange rates There are two basic systems that can be used to determine the exchange rate between one country's currency and another's: a floating exchange rates (al

Economic growth and economic development, Economic growth and Economic deve...

Economic growth and Economic development: Economic Growth refers to an increase in real aggregate output (real GDP) reflected in increased real per capita income.A country is

Healthcare economics, #quesExamine the expenditure trends over the last 40 ...

#quesExamine the expenditure trends over the last 40 years. What are the direction and magnitude of changes in spending in and between these various categories (with the exception

What are the factors of production, Factors of Production :   The factors o...

Factors of Production :   The factors of production are the resources that are essential for production. They are usually separated into 4 dissimilar groups: Land - all natu

Project, I have to make a research paper project on Investigating the buyin...

I have to make a research paper project on Investigating the buying behavior of individuals in the white goods sector and seeing if there exists any negative relationship between d

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd