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QUESTION

Consider the infinitely repeated game where the stage game is the matrix in Exercise 2(c).

Consider the infinitely repeated game where the stage game is the matrix in Exercise 2(c). Under what conditions is there a subgame perfect equilibrium in which the players alternate between (C, C) and (C, D), starting with (C, C) in the first period? Under what conditions is there a subgame perfect equilibrium in which the players alternate between (C, C) and (D, D), starting with (C, C) in the first period? (Use modified trigger strategies.)

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