Consider the following sequential game. We want to find subgame perfect Nash equilibrium (SPNE) by using backward induction. Tasty Pizza Veggie BBQ Prawn Pizza Jazz Pizza Jazz Pizza Jazz 7 meats Seabod Jazz 7 meats Seafood Jazz 7 meats Seafbod Jazz (18,11) (8,8) (9,9) (20,12) (16,13) (5,1) (17,17) (16,19) (18,17) (a) Find the equilibrium strategy of Pizza Jazz: • the optimal action of Pizza Jazz at its left node is 7 meats • the optimal action of Pizza Jazz at its middle node is Seafood • the optimal action of Pizza Jazz at its right node is Seafood (b) The equilibrium strategy of Tasty Pizza is Veggie Therefore, SPNE is: • Tasty Pizza plays Veggie • Pizza Jazz plays ( 7 meats Seafood Seafood
Consider the following sequential game. We want to find subgame perfect Nash equilibrium (SPNE) by using backward induction. Tasty Pizza Veggie BBQ Prawn Pizza Jazz Pizza Jazz Pizza Jazz 7 meats Seabod Jazz 7 meats Seafood Jazz 7 meats Seafbod Jazz (18,11) (8,8) (9,9) (20,12) (16,13) (5,1) (17,17) (16,19) (18,17) (a) Find the equilibrium strategy of Pizza Jazz: • the optimal action of Pizza Jazz at its left node is 7 meats • the optimal action of Pizza Jazz at its middle node is Seafood • the optimal action of Pizza Jazz at its right node is Seafood (b) The equilibrium strategy of Tasty Pizza is Veggie Therefore, SPNE is: • Tasty Pizza plays Veggie • Pizza Jazz plays ( 7 meats Seafood Seafood
Chapter8: Game Theory
Section: Chapter Questions
Problem 8.1P
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