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Consider a game in which there are two players, A and B. Player A moves first and chooses either Up or Down. If A chooses Up the game is over, and each player gets a payoff of 2. If A moves Down then B gets a turn and chooses among Left and Right. If B chooses Left, both players get 0; if B chooses Right, A gets 3 and B gets 1.

1. Draw the tree for this game, and discover the sub game-perfect equilibrium.

2. Show this sequential-play game in strategic form, and find all of the Nash equilibrium. Which is or are sub game-perfect? Which is or are not? If any are not, describe why.

What method of solution could be used to discover the sub game-perfect equilibrium from the strategic form of the game?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91224082

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