Grim Trigger
Two players repeat a Prisoner's Dilemma forever with discount factor δ per period. Stage payoffs: mutual cooperation 3, mutual defection 1, unilateral defection 5 (the sucker gets 0). Under grim trigger strategies (cooperate until anyone defects, then defect forever), what is the minimum discount factor δ for which cooperation is sustainable? Express as a fraction.
Related problems
Source: Standard repeated-games strategy from the folk-theorem literature; the trigger construction follows James Friedman (1971). Statement written for AxiomIQ.