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3 Repeated games Suppose AMD and Intel dominate the marbot for high-spesd mieroprocessor chipo for persotal computers. Intel and AMD sumaltaneonsly set their chip prices. The payoff matrix below illestrates their profit payoffs (in millions of dolturs per wowk) froan setting either bigh or low prices for their computer chips. AEB 5185: Problem Set \#7-Introdnction to game theory 4 (a) Assume the pricing decivion can initially be treated as a one-shot game. What is the Nash equilibrium tharket outcome in this pricing game? (b) From the perspective of these two firms, is this an optimal market ontcome? In other words, is there another combination of pricing strategies that could yield higher protits for both finas? Why would this cooperative outcotuc not materialize in a one-shot game? (c) Now, assime that this pricing game can be modelod as an infinitely-repeated game. What is a trigge strategy that these firms could employ to enforce the cooperative pricing outcome? (d) If lntel were to cheat on this cooperative pricing outcoune, bow much could they earu in weekly profits? (e) If AMD were to chest on this cooperative pricing outconse, how anch could they earn in weckly profits? (f) If the interest rate i 300%, would the copperative oatcotae be stostained

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