4. (Backward induction/normal form) Consider the following sequential move game played by three players; Mars, Mercury and Venus. Mars А B Mercury Venus R M. Mars Mars b 1 P T 1 Mars 2 1 Mercury 4 2 3 Venus 1 3 (i) List the strategies of each player. (ii) Find the subgame perfect Nash equilibrium. (iii) Present the strategic form of the game and find all the pure strategy Nash equilibria in the strategic form. (Mars is the row player, Mercury is the column player and Venus is the matrix player.) For each Nash equilibrium in the strategic form that is not subgame perfect in the extensive form, provide a reason why it is not so.
4. (Backward induction/normal form) Consider the following sequential move game played by three players; Mars, Mercury and Venus. Mars А B Mercury Venus R M. Mars Mars b 1 P T 1 Mars 2 1 Mercury 4 2 3 Venus 1 3 (i) List the strategies of each player. (ii) Find the subgame perfect Nash equilibrium. (iii) Present the strategic form of the game and find all the pure strategy Nash equilibria in the strategic form. (Mars is the row player, Mercury is the column player and Venus is the matrix player.) For each Nash equilibrium in the strategic form that is not subgame perfect in the extensive form, provide a reason why it is not so.
Chapter14: Transaction Costs, Asymmetric Information, And Behavioral Economics
Section: Chapter Questions
Problem 1.2P
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This is from economics NASH EQUILIBRIUM
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