2. Two players are engaged in a infinitely repeated game whose stage game is shown below.
L R
U 5,5 1,2
D 6,2 2,4
a) Find all feasible individually rational payoffs.
b) Is payoff (5,5) possible in an SPE (assuming is sufficiently large)? Why?
c) Can you suggest a simple trigger strategy achieving payoff (5,5)? (Hint: find NE of
the stage game and recall the weak perfect folk theorem.)
d) What is the smallest value of making this simple trigger strategy possible?