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116A_HW9 - R and then(r,y gives(7,2(4 points a Draw the...

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Econ 116A, Fall 2010 Homework # 9 1. Consider the following extensive form game. Player 1 chooses between actions L and R. If L, then player 2 observes that and chooses between X and Y. If R, then the two play a simultaneous game – 1 chooses between l and r and 2 chooses between x and y. The payoffs of 1 and 2 are as follows. L and then X gives (7,5); L and then Y gives (9,7); R and then (l,x) gives (6,4); R and then (l,y) gives (10,8); R and then (r,x) gives (8,10); and
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Unformatted text preview: R and then (r,y) gives (7,2). (4 points) a. Draw the game tree. b. Show the subgames of the game. c. Find the subgame perfect equilibria (equilibrium) of the game. d. Find the Nash equilibria of the game and compare your answers in parts c and d. Which of the NE are based on non credible threats? 2. Find the SPE of the entry game # 3 (discussed in class) using backward induction approach. (1 point)...
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