Game Theory ||

Question 1

Describe an extensive form representation

Answer 1

• Identity and number of players
• Timing of moves by each player
• Choice of actions at each move
• Information about history of the game
• Pay-offs over all possible outcomes

Question 2

Describe the main determinants of a game tree

Answer 2

• Decision nodes: A player’s turn to move
• Branches: Actions available at each move
• Terminal nodes: Pay-offs
• Information sets: Knowledge about the history of the play of the game at each move

Question 3

In a dynamic game, what is the difference between strategies and actions?

Answer 3

A strategy specifies an action for a player to take at each of her decision nodes, even if it is not reached in the actual play of the game. A strategy is a complete contingent plan

Question 4

What is a Subgame?

Answer 4

A sub-game is a smaller game embedded in the complete game, starting from some point in the original game and including all subsequent nodes and branches. Be sure not to cut any information sets

Question 5

What is SPNE?

Answer 5

A sub-game perfect nash equilibirum is a strategy profile that the strategies in every sub-game are a Nash Equilibrium.