Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consider the following game. Which one of the following statements is TRUE?
1. This is a dynamic setting game with imperfect information.
2. By backward induction, Player 1 chooses A, then Player 2 chooses D, then Player 1 chooses J, game over.
3. By backward induction, the payoff for Player 1 will be 8, the payoff for Player 2 will be 1.
4. By back induction, the game will end up in the third stage.
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