Question

UJ SIuer the following game between Barban and you in extensive-form 200 100,100 200,0 200,0 Barbara 0,200 150, 150 300,0 0.200 0,300 200 200 reject Barbara accept 400

Solve game by backward induction using the normal form in the future and past?

Answer 1

hogc100,oo uslo 72000) 400 200, 300 you 20 to 2007 3010 Barbara Boo you 200L Accept (359yo y Brot cor roo) (350, you) Hood 20,300) (200,200 |

Subgame of you 200,300,400 when barbara chooses 200:you chooses 200 as it is giving him 100 and othe two are giving him nothing.

Subgame of you 200,300,400 when barbara chooses 300: you chooses 300 as it giving him 100 and others two are giving him nothing

Subgame of you choosing between 200,300,400 when barbara chooses 400: you chooses 400 as it giving him 200 and others two are giving nothing

Three optimally chosen options are available in front of Barbara

Subgame of Barbara choosing between 200,300,400 when she reject: Barbara chooses 400 a it is giving her highest payoff.

Subgame of reject and accept: Barbara chooses accept as it giving her 350 compare to reject which is giving her 200

,So the sub game perfect equilibrium is (350,400)