3. Consider this game in an extensive form (there are 2 players, A and B): right left B B (2, 3) (4, 2) (6, 6) (1, 9) (1, 9) (7, 7) (5, 3) a. Find the subgame-perfect equilibrium. (1) b. Explain why the players cannot reach the outcome with the payoffs circled in orange (which they both would prefer to the equilibrium outcome). (1) gauche milieu gauche milieu gauche milieu droit

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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3. Consider this game in an extensive form (there are 2 players, A and B):
right
left
B
B
(2, 3)
(4, 2)
(6, 6)
(1, 9)
(1, 9)
(7, 7) (5, 3)
a. Find the subgame-perfect equilibrium. (1)
b. Explain why the players cannot reach the outcome with the payoffs circled in orange
(which they both would prefer to the equilibrium outcome). (1)
gauche
milieu
gauche
milieu
gauche
milieu
droit
Transcribed Image Text:3. Consider this game in an extensive form (there are 2 players, A and B): right left B B (2, 3) (4, 2) (6, 6) (1, 9) (1, 9) (7, 7) (5, 3) a. Find the subgame-perfect equilibrium. (1) b. Explain why the players cannot reach the outcome with the payoffs circled in orange (which they both would prefer to the equilibrium outcome). (1) gauche milieu gauche milieu gauche milieu droit
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