Chapter 12 Repeated Games - MIT OpenCourseWare

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Indeed, given the behavior in the last round, the game in the initial round reduces to 6 6 1 7 7 1 2 2 whereweadd1toeachplayer’spayo ffs, accounting for his payoff in the last round. The unique equilibrium of this reduced game is ( ). This leads to a unique subgame-

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