Rose and Colin play the following dynamic game with Rose moving first. In her first move, Rose has a choice of either 0 or 3. If she chooses 3, then Rose and Colin play G3 with Colin moving first. If Rose chooses 0 in her first move, then Colin can play either 1 or 2 in his first move. If he plays 1, then Rose and Colin play G₁ with Rose moving first, and if he plays 2, then Rose and Colin play G₂ with Rose moving first. Draw the game tree associated with this game, and find the backwards induction solution.

ENGR.ECONOMIC ANALYSIS
14th Edition
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Chapter1: Making Economics Decisions
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Let G₁, G₂ and G3 be the following games.
Colin
A
Rose
B
A (10,3)
(7,5)
B (6,6) (8.4)
G₁
Rose
Rose
Colin
A
B
A (4,4)
(3,6)
B (5,3) (2,7)
G3
Colin
A
B
A (5,8) (4,2)
B (9,2) (3,5)
G₂
Rose and Colin play the following dynamic game with Rose moving first. In her
first move, Rose has a choice of either 0 or 3. If she chooses 3, then Rose and
Colin play G3 with Colin moving first. If Rose chooses 0 in her first move, then
Colin can play either 1 or 2 in his first move. If he plays 1, then Rose and Colin
play G₁ with Rose moving first, and if he plays 2, then Rose and Colin play G₂ with
Rose moving first.
Draw the game tree associated with this game, and find the backwards induction
solution.
Transcribed Image Text:Let G₁, G₂ and G3 be the following games. Colin A Rose B A (10,3) (7,5) B (6,6) (8.4) G₁ Rose Rose Colin A B A (4,4) (3,6) B (5,3) (2,7) G3 Colin A B A (5,8) (4,2) B (9,2) (3,5) G₂ Rose and Colin play the following dynamic game with Rose moving first. In her first move, Rose has a choice of either 0 or 3. If she chooses 3, then Rose and Colin play G3 with Colin moving first. If Rose chooses 0 in her first move, then Colin can play either 1 or 2 in his first move. If he plays 1, then Rose and Colin play G₁ with Rose moving first, and if he plays 2, then Rose and Colin play G₂ with Rose moving first. Draw the game tree associated with this game, and find the backwards induction solution.
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