Econ110_Section5

# Econ110_Section5 - Section 5: SPNE and Brinkmanship Daniel...

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Unformatted text preview: Section 5: SPNE and Brinkmanship Daniel Egel October 5, 2008 1 Subgames 1.1 Definition of a Subgame 1 A subgame is a collection of nodes and branches that satisfy three properties: 1. It starts at a single decision node. 2. It contains all branches that are preceded by this node. 3. If it contains any part of an information set, then it contains the entire information set. 1.2 Identifying Subgames For each of the following extensive form games: Count the total number of subgames that you find Identify all the subgames 1 This is paraphrased from your book (Dutta 1999, p. 196). 1 2 2 Finding the SPNE 2.1 Definition of SPNE 2 A strategy, S , is a subgame perfect Nash equilibrium if for every subgame, g , S ( G ) is a Nash equilibrium within that subgame. Important notes: For a strategy, S , to be a SPNE we need to have actions specified for all players in every subgame 2 This is paraphrased from your book (Dutta 1999, p. 197)....
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## This note was uploaded on 12/25/2010 for the course PO 137 taught by Professor Power during the Fall '10 term at University of California, Berkeley.

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Econ110_Section5 - Section 5: SPNE and Brinkmanship Daniel...

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