Multistage and Finitely Repeated games Flashcards
1
Q
How many strategies does a player have in a game where each player has 2 actions and it is repeated once
A
1 information set for stage one, 4 different information sets in stage 2, given that there are 4 different outcomes from stage 1. As there are 2 actions, total strategies is 2^5=32.
2
Q
What are requirements to having a non-equilibrium points as part of SPNE?
A
1) 2 pareto rankable NE in final stage (carrot, stick)
2) A large enough discount factor
3
Q
If a multi-stage game has a unique NE in each stage?
A
Then it has a unique SPNE