Consider the following sequential-move game, where the first value specified in the end nodes is the payoff for Player A, the second value is the payoff for Player B and the third value is the payoff for Player C. Determine its subgame perfect equilibrium. Identify the equilibrium outcome and describe carefully the strategy used by each player in equilibrium (remember, a strategy for a player is a complete specification of what action to take in every possible contingency). N AD n1 S B n₂ C تی u d -1, 4, -2 AND n4 S 0,-1, 3 A ng 3, -2, 10 1,0, 3 N S -4, 6, -1 1, 3, 3
Consider the following sequential-move game, where the first value specified in the end nodes is the payoff for Player A, the second value is the payoff for Player B and the third value is the payoff for Player C. Determine its subgame perfect equilibrium. Identify the equilibrium outcome and describe carefully the strategy used by each player in equilibrium (remember, a strategy for a player is a complete specification of what action to take in every possible contingency). N AD n1 S B n₂ C تی u d -1, 4, -2 AND n4 S 0,-1, 3 A ng 3, -2, 10 1,0, 3 N S -4, 6, -1 1, 3, 3
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.7P
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![Please show the full working out
Question 1: Backward Induction
Consider the following sequential-move game, where the first value specified in the end
nodes is the payoff for Player A, the second value is the payoff for Player B and the third
value is the payoff for Player C. Determine its subgame perfect equilibrium. Identify the
equilibrium outcome and describe carefully the strategy used by each player in equilibrium
(remember, a strategy for a player is a complete specification of what action to take in every
possible contingency).
A
N
C
n₁
S
B
1₂
b
C
D
n3
u
d
-1, 4, -2
AN
n4 S 0,-1, 3
A
3, -2, 10
17
ng
1,0, 3
N
S
-4, 6, -1
1, 3, 3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9b8bd015-a38a-4986-a91e-a477dbe1a4e6%2F0d9ea7d8-1723-4ab1-b0c0-242d0a0c7c55%2Fha1cxpi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Please show the full working out
Question 1: Backward Induction
Consider the following sequential-move game, where the first value specified in the end
nodes is the payoff for Player A, the second value is the payoff for Player B and the third
value is the payoff for Player C. Determine its subgame perfect equilibrium. Identify the
equilibrium outcome and describe carefully the strategy used by each player in equilibrium
(remember, a strategy for a player is a complete specification of what action to take in every
possible contingency).
A
N
C
n₁
S
B
1₂
b
C
D
n3
u
d
-1, 4, -2
AN
n4 S 0,-1, 3
A
3, -2, 10
17
ng
1,0, 3
N
S
-4, 6, -1
1, 3, 3
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