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

(a) Draw the tree for this game, and find the subgame-perfect equilibrium.

(b) Show this sequential-play game in strategic form, and find all the Nash equilibria. Which is or are subgame perfect and which is or are not? If any are not, explain why.

(c) What method of solution could be used to find the subgame-perfect equilibrium from the strategic form of the game?

Game Theory, Economics

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