Draw a normal form for this tree. 2. Find all the subgames in the tree. 3. Find SPNE (Subgame Perfect Nash Equilibrium) of the tree and explain how it works.
Draw a normal form for this tree. 2. Find all the subgames in the tree. 3. Find SPNE (Subgame Perfect Nash Equilibrium) of the tree and explain how it works.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
1. Draw a normal form for this tree.
2. Find all the subgames in the tree.
3. Find SPNE (Subgame Perfect Nash Equilibrium) of the tree and explain how it works.

Transcribed Image Text:1 Prosecutor
Prosecutor
1 Delainey
No deal
3 Fastow
Delainey
deal
Fastow
deal
Delainey
Fastow
Аcсept
Reject
Ассept
Reject
Prosecutor
1
6
1
Fastow
deal
No deal
1
1
Fastow
4
2
Аcсеpt
Reject
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3
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2
2
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