Question 2 (Subgame-Perfect Nash Equilibrium Consider the following sequential game of imperfect information. 5,5 P2 (c) soning. T 0,6 P1 L P2 B ( 6,0 R 2,0 P2 I 1,1 PI b 0,2 e 5,1 P2 P2 A' R r 0,0 PI B' ( 0,0 P2 1,5 (a) How many information sets does this game have? What constitutes a strategy in a sequential game of imperfect information? (b) Find all the pure strategy subgame-perfect Nash equilibria of this game. Remember to write them down properly. Could this game support a SPNE in mixed strategies? Explain your rea- (d) Suppose this game were a game of perfect information. What would the game tree look like? What would be the SPNE outcome?

Question 2 (Subgame-Perfect Nash Equilibrium Consider the following sequential game of imperfect information. 5,5 P2 (c) soning. T 0,6 P1 L P2 B ( 6,0 R 2,0 P2 I 1,1 PI b 0,2 e 5,1 P2 P2 A' R r 0,0 PI B' ( 0,0 P2 1,5 (a) How many information sets does this game have? What constitutes a strategy in a sequential game of imperfect information? (b) Find all the pure strategy subgame-perfect Nash equilibria of this game. Remember to write them down properly. Could this game support a SPNE in mixed strategies? Explain your rea- (d) Suppose this game were a game of perfect information. What would the game tree look like? What would be the SPNE outcome?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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