-Suppose that the game depicted in Figure 11.7 is modeled as a sequential move game with Player A moving first and the payoffs are (Player A, Player B). The subgame perfect equilibrium for this game is:
A) {A3 6 B3}
B) {A2 6 B1}
C) {A1 6 B3}
D) {A3 6 B1}
E) None of the above. This game has multiple subgame perfect equilibria

Question

-Suppose that the game depicted in Figure 11.7 is modeled as a sequential move game with Player A moving first and the payoffs are (Player A, Player B). The subgame perfect equilibrium for this game is:
A) {A3 6 B3} 
B) {A2 6 B1} 
C) {A1 6 B3} 
D) {A3 6 B1} 
E) None of the above. This game has multiple subgame perfect equilibria

Quizplus · Accepted Answer

In a sequential move game, the subgame perfect equilibrium is found by backward induction, where we look at the last moves of the game and determine the best response for each player at every decision point. In this case, Player A moves first, and knowing Player B's best responses to each of A's possible actions, A will choose the action that maximizes their own payoff given B's responses. The choice {A3 6 B1} indicates that Player A chooses their third action and, anticipating Player B's best response, leads to Player B choosing their first action, which results in the highest payoff for Player A considering B's optimal responses. This is the essence of finding the subgame perfect equilibrium in sequential games.

-Suppose That the Game Depicted in Figure 11