Consider the following sequential-move game. There are two players: player 1 and player 2. First, player 1 must choose to play either T, M, or B. If player 1 plays T, then the game ends and both players obtain payoff 0. If player 1 plays M or B, then player 2 must choose to play either U or D, and then the game ends. If player 1 and player 2 play M and U, respectively, then their payoffs are –1 and 2, respectively. If player 1 and player 2 play M and D, respectively, then their payoffs are 2 and 4, respectively. If player 1 and player 2 play B and U, respectively, then their payoffs are 0 and 3, respectively. If player 1 and player 2 play B and D, respectively, then their payoffs are -3 and –1, respectively. 3. (a) Find all the pure-strategy subgame-perfect equilibria. Use a game tree to illustrate. Find all the pure-strategy Nash equilibria. Use a game table to |(b) illustrate.

Consider the following sequential-move game. There are two players: player 1 and player 2. First, player 1 must choose to play either T, M, or B. If player 1 plays T, then the game ends and both players obtain payoff 0. If player 1 plays M or B, then player 2 must choose to play either U or D, and then the game ends. If player 1 and player 2 play M and U, respectively, then their payoffs are –1 and 2, respectively. If player 1 and player 2 play M and D, respectively, then their payoffs are 2 and 4, respectively. If player 1 and player 2 play B and U, respectively, then their payoffs are 0 and 3, respectively. If player 1 and player 2 play B and D, respectively, then their payoffs are -3 and –1, respectively. 3. (a) Find all the pure-strategy subgame-perfect equilibria. Use a game tree to illustrate. Find all the pure-strategy Nash equilibria. Use a game table to |(b) illustrate.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter8: Game Theory

Section: Chapter Questions

Problem 8.5P

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