Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:a)
Return to the two-player game tree in part (a) of Exercise
U2 in Chapter 3.
(a)
(b)
Write the game in strategic form, making Albus the
Row player and Minerva the Column player. Find all
Nash equilibria.
For those equilibria you found in part (a) of this
exercise that are not subgame-perfect, identify the
reason.
13,0
a
MINERVA
12,1
N
1,1
a
MINERVA
ALBUS
E
S
MINERVA
15,0
20
a
4,4
b
1,5
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