In a dynamic game, rational players
A)will reject outcomes that are not subgame perfect.
B)use backward induction to determine best responses.
C)have strategies that select a Nash equilibrium in the game as a whole.
D)All of the above.

Question

Quizplus · Accepted Answer

All of the above statements are true for rational players in a dynamic game. Rational players are forward looking and will reject outcomes that are not subgame perfect. They will use backward induction to determine the best possible response at each stage of the game. Lastly, their strategies will select a Nash equilibrium in the game as a whole. Therefore, Choice D is the best answer.

In a Dynamic Game, Rational Players