Question: 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

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 between Left and Right. If B chooses Left, both players get 0; if B chooses Right, A gets

3 and B gets 1.

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

(b) Show this sequential-play game in strategic form, and find all of the pure strategy Nash equilibrium.

Which is or are subgame-perfect? 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?

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