Exercise 5.5 a. Determine the unique PPSE of the game at the top of page 43....

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Exercise 5.5 a. Determine the unique PPSE of the game at the top of page 43. b. Now modify the game by altering II's payoffs-and nothing else! -in such a way that the following conditions are satisfied: (i) every payoff to II is increased; (ii) there is a unique PPSE; and; (iii) II gets less at this PPSE than he gets at the PPSE of the original game. 1.5. BACKWARD INDUCTION. PERFECT SES (8,0) (7,2) START b (9,3) II 43 Exercise 5.5 a. Determine the unique PPSE of the game at the top of page 43. b. Now modify the game by altering II's payoffs-and nothing else! -in such a way that the following conditions are satisfied: (i) every payoff to II is increased; (ii) there is a unique PPSE; and; (iii) II gets less at this PPSE than he gets at the PPSE of the original game. 1.5. BACKWARD INDUCTION. PERFECT SES (8,0) (7,2) START b (9,3) II 43