Experiment 14 GT1

Experiment 14

• infinite repeated game
• no Backward Induction possible - there is no last round to roll back from
• any round is equal, probability of each run being the last round is the same
• NE of 0.08/0.08 still valid
  • subgames look line the actual game, i.e. no real subgames
• important factors:
  • fixed Discounting factor $\delta$ … $\sum _{t=1}^{\infty }{\delta }^t=\frac{\delta }{1-\delta }$
  • continuation probability