Suppose you are working for an independent firm which advises companies what strategies the\nplay during repeated interaction.\nWhen analyzing an infinitely repeated game between Kochakola and Bepis, you find that Grim Tr\ncan support cooperative play so long as both companies care enough about future consumption\ncompared to present consumption. In particular, you find that a cooperative outcome can be sup\nas long as $\delta_K > 0.78$ and $\delta_B > 0.81$. However, your role as a third-party mediator to the compan\nmandates that you use a common discount factor (representing that of society) when recommen\nstrategies to each firm. After months of research¹, your best guess of society's discount factor is\n0.8.\nWhat is your advice to each company, and why? In other words, can cooperative play be supporte\nequilibrium (and why)?
