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

Perfect competition, Perfect Competition It's a market where conditions...

Perfect Competition It's a market where conditions prevail like that buyers and suppliers are without the ability to manipulate price in any significant way such that the marke

Source of economic growth and development, Question: (a) Explain the fa...

Question: (a) Explain the factors that contributed to the adoption of structural adjustment programme by a majority of Least Developed Countries in the 1980s? (b) Describe t

Mass, what is the mass of a body when it is taken to the moon

what is the mass of a body when it is taken to the moon

Mathematical presentation of utility maximisation, Mathematical Presentatio...

Mathematical Presentation of Utility maximisation: Consumer's objective is to maximise her utility by solving UMP. To solve UMP, we set the Lagrange function of the correspond

What caused the end of malthusian age, So what caused the end of Malthusian...

So what caused the end of Malthusian age? How did humanity escape from the trap in that invention and ingenuity increased the numbers though not the material well-being of humanity

Currency was used in the 1700s, What currency was used in the 1700s? Ans...

What currency was used in the 1700s? Ans) this is depends on the country. Most currencies, though, were based on gold and silver. In America, in the 13 colonies, tobacco wa

Potential Pareto Improvement, I need some help to answer a discussion topic...

I need some help to answer a discussion topic question about Potential Pareto Improvement, based on an article

Economics, define economics in plural sense. .

define economics in plural sense. .

Objectives of the imf, International Monetary Fund: International Mone...

International Monetary Fund: International Monetary Fund (IMF) is one of the two institutions that were established as a result of the Brettonwoods Conference in 1944, the oth

Long-run behavior, The Long-Run Behavior of Natural Resource Prices Ob...

The Long-Run Behavior of Natural Resource Prices Observations – Exhaustion of copper has increased by a hundred fold from 1880 through 1998 signifying a large increase in

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