Construct a space of conventional strategies ˜_i for each player i = 1, 2 that satisfies Condition (N) in Subsection 11.4.3 and is composed of exactly three strategies..

Consider two agents repeatedly playing a symmetric pure coordination

game with payoffs given in Table 11.4.

(a) Construct a space of conventional strategies ˜*_**i *for each player *i *= 1*, *2 that

satisfies Condition (N) in Subsection 11.4.3 and is composed of exactly

*three *strategies.

(b) Assume that each player *i *’s beliefs are uniform on ˜*_ **j **, **i**, **j *= 1*, *2*, **i *_= *j *.

Is (CP) satisfied?

(c) Given discount rate *δ *= 1*/*2 and the uniform beliefs postulated in (b), determine

some strategy profile consistent with (EPM). Discuss your answer

in view of the conclusions established by Theorem 11.9.

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