Dynamic games Flashcards
What is a singleton?
It is an information set that contains only one node. A player then knows if they are at this node.
What is a terminal node?
One which don’t precede any other node and give a payoff.
What is the relation between nodes?
Transitive, asymmetric and incomplete.
What is a game of perfect information?
A game with complete information in which every information set is a singleton and there are no moves of ‘Nature’.
How many strategies does a player have?
If they have n information sets and m possible actions, then they have M^n possible pure strategies.`
What does it mean for a strategy to be sequentially rational?
If the strategy is a best response in all information sets and it makes sense using backward induction both on AND off the equilibrium path.
Define Subgame-Perfect-Nash-Equilibrium
Implies a nash equilibrium in all subgames, a best response on and off equilibrium path
