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

Law of demand, "price is becoming cheaper,yet the demand for car is not ris...

"price is becoming cheaper,yet the demand for car is not rising".does it mean law of demand is not operative?

Black economy public policy interface, Black Economy Public Policy Interfac...

Black Economy Public Policy Interface: The above mode of functioning and expansion of the black economy became an important basis for policy disruption in India. The undergrou

1, Find the market-clearing price and quantity of burritos.

Find the market-clearing price and quantity of burritos.

POLICY FAILURE, GROWTH OF EMPLOYMENT OPPORTUNITIES: Policy failure ref...

GROWTH OF EMPLOYMENT OPPORTUNITIES: Policy failure refers to situations:   i) When the objectives of public policy are attained partially or inadequately or in a distorted

integrated programme in management, 1. Suppose we observe that the price o...

1. Suppose we observe that the price of soyabeans goes up while the quantity of soyabeans sold goes up as well. Use the supply and demand curves to illustrate two possible explanat

Fiscal imbalance, Fiscal Imbalance: The persistent rise in resource ga...

Fiscal Imbalance: The persistent rise in resource gap has led to a growing volume of public debt. The central feature that emerges is a serious fiscal imbalance, arising from

Microeconomics, Five identical people live in a small town and can earn a l...

Five identical people live in a small town and can earn a living either by having cattle $100 or by becoming a singer. If one person competes their expected payment is 210, if two

Types of unemployment, Types of unemployment: Frictional Unemployment...

Types of unemployment: Frictional Unemployment: -It refers to unemployment caused by changes in individual labour markets.This is the type of unemployment resulting from peop

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