EXERCISE 443.1 (Delayed modified grim trigger strategies)) Choose a positive in- teger k and consider the strategy that chooses D in the first k periods of the game, regardless of the history, and then follows the modified grim trigger strategy, start- ing in state C. Find the range of values for the discount factor for which the strategy pair in which each player uses this strategy is a subgame perfect equilibrium.

EXERCISE 443.1 (Delayed modified grim trigger strategies)) Choose a positive in- teger k and consider the strategy that chooses D in the first k periods of the game, regardless of the history, and then follows the modified grim trigger strategy, start- ing in state C. Find the range of values for the discount factor for which the strategy pair in which each player uses this strategy is a subgame perfect equilibrium.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.3P

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