The game tree below illustrates the payoffs for two runners who can either run in a marathon or stay home. What is the equilibrium in this sequential-move game? Runner 2 (15,5) Run Run Stay Home (20,10) (8,18) Run Runnerl Stay Home Runner 2 Stay Home (2,2) Runner 1 will run, and Runner 2 will stay home. Both runners will run. Runner 1 will stay home, and Runner 2 will run. Both runners will stay home.

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter15: Strategic Games
Section: Chapter Questions
Problem 15.4IP
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The game tree below illustrates the payoffs for two runners who can either run in a marathon or stay home.
What is the equilibrium in this sequential-move game?
(15,5)
Run
Runner 2
Run
Stay Home
(20,10)
(8,18)
Run
Runnerl
Stay Home
Runner 2
Stay Home
(2,2)
Runner 1 will run, and Runner 2 will stay home.
Both runners will run.
Runner 1 will stay home, and Runner 2 will run.
Both runners will stay home.
Transcribed Image Text:The game tree below illustrates the payoffs for two runners who can either run in a marathon or stay home. What is the equilibrium in this sequential-move game? (15,5) Run Runner 2 Run Stay Home (20,10) (8,18) Run Runnerl Stay Home Runner 2 Stay Home (2,2) Runner 1 will run, and Runner 2 will stay home. Both runners will run. Runner 1 will stay home, and Runner 2 will run. Both runners will stay home.
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