Game Theory Question 4

4. In a multi-period chain store game with 30 cities, the payoffs of all players are just like

described in class with a = 2 and b = 0:5.

a) Suppose the local store in city 2 (counting from the end) was the first to enter in a

PBE. What is the possible range of the parameter pc in this problem?

b) What is the expected payoff of the chain store in this game?

c) What is the expected payoff of the local store in city 2?