Answer to Question #227376 in Macroeconomics for Prabo

Question #227376

 Consider the following game. Suppose that players play simultaneously over many periods. In each period, each player best responds to the action played by the opponent the period before.       

                                  L        M        R
                        U        0,0       4,5      5,4
                        M        5,4       0,0      4,5
                        D        4,5       5,4      0,0


Assume that in period 1, players start with the strategy profile (M,L). Describe play in the next 7 periods. Does a pattern emerge?


1
Expert's answer
2021-08-22T15:49:38-0400

Period 1 ML strategy, player A will play ML, player B will play UR

Period 2 UM strategy, player A will play DM, Player B will play MR

Period 3 UR strategy, player A will play UR, player B will play ML

Period 4 DL strategy player A will play DM, player B will play UR

Period 5 DM strategy, player A will play ML, Player B will play UR

Period 6 UL strategy, player A will play ML, player B will play DM

Period 7 MM strategy player A will play DM, player B will play ML


A pattern emerges where by each player assumes a strategy that gives maximum payoff


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