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.

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.3P
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Let G₁, G₂ and G3 be the following games.
Colin
A B
Rose
A (10,3) (7.5)
B (6,6)
(8,4)
G₁
Rose
Rose
Colin
A
Colin
A
B
A (5,8) (4.2)
B (9.2) (3,5)
G₂
B
(3,6)
A (4,4)
B (5.3) (2,7)
G3
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 B Rose A (10,3) (7.5) B (6,6) (8,4) G₁ Rose Rose Colin A Colin A B A (5,8) (4.2) B (9.2) (3,5) G₂ B (3,6) A (4,4) B (5.3) (2,7) G3 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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9781337517942
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