Consider the game depicted below. Player 1 decides between A and B in stage 1 of the game, and between G and H in stage 3 (if it is reached). Player 2 decides between C and D if Player 1 chose A, or between E and F if Player 1 chose B, in stage 2 of the game.

(a) List all the possible pure strategies for each player in this game and illustrate the payoffs from each pair of strategies in a matrix. [Note: each player's strategy should prescribe an action for each of his/her information node (set), regardless of whether that node will be reached in the outcome.]

(b) Identify the Nash Equilibria strategies and payoffs.

(c) Which of the Nash Equilibria is/are also subgame perfect equilibrium/equilibria. Explain.

Transcribed Image Text:

4, 6 A D 5,4 1 в 3,5 4,2 H 7,6 4, 6 A D 5,4 1 в 3,5 4,2 H 7,6

Answer rating: 100% (QA)

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