-Suppose that the game depicted in Figure 11.5 is modeled as a multistage game with Magna Corporation moving first. The payoffs to both companies from a subgame perfect equilibrium are:
A) (25, 10).
B) (30, 15).
C) (10, 25).
D) (20, 20).
E) (25, 25).

Question

-Suppose that the game depicted in Figure 11.5 is modeled as a multistage game with Magna Corporation moving first. The payoffs to both companies from a subgame perfect equilibrium are:
A) (25, 10). 
B) (30, 15). 
C) (10, 25). 
D) (20, 20). 
E) (25, 25).

Quizplus · Accepted Answer

The subgame perfect equilibrium is for Magna to choose "High" and for Micro to choose "High" in response. This results in payoffs of (25, 10) for Magna and Micro, respectively.

-Suppose That the Game Depicted in Figure 11