Two people play the game twice and watch each other's first stage before picking an option in the second stage. Both players discount second-stage payoffs using a common discount factor of 0.6 (€ [0,1]).
Player 2:
G0
6^2
T10
How many pure strategies does each player have in the two-stage game?
Which action profiles can be sustained in the first stage of a pure-strategy subgame perfect equilibrium for 6 = 12?
What is the smallest 6 for which the profile (E, C) can be played in the first stage of a subgame perfect equilibrium?
Player