Consider the stage game above and suppose it is repeated twi

Consider the stage game above and suppose it is repeated twice without discounting. There exist a SPNE in which the first period outcome is (B,D). To support this SPNE player 1 plays action B in the first period and action__ in the second period. Player 2 plays action D in the first period, and plays action__ in the second if the first period outcome was (B,D) and plays action__ otherwise.

please explain

Solution

To support this SPNE player 1 plays action B in the first period and action B in the second period. Player 2 plays action D in the first period and plays action D in the second if the first-period outcome was (B, D) and plays action AD otherwise.