What is the subgame perfect equilibrium of the game?

In game theory, a subgame perfect equilibrium (or subgame perfect Nash equilibrium) is a refinement of a Nash equilibrium used in dynamic games. A strategy profile is a subgame perfect equilibrium if it represents a Nash equilibrium of every subgame of the original game.

What is perfect equilibrium in economics?

Key Takeaways. The Nash equilibrium is a decision-making theorem within game theory that states a player can achieve the desired outcome by not deviating from their initial strategy. In the Nash equilibrium, each player’s strategy is optimal when considering the decisions of other players.

What is sub game method?

5.3. 3 Subgame Perfect Equilibrium. In game theory, a subgame perfect equilibrium (or subgame perfect Nash equilibrium) is a refinement of a Nash equilibrium used in dynamic games. A common method for determining subgame perfect equilibria in the case of a finite game is backward induction.

What is the sub perfect Nash equilibrium in your ultimatum game?

The Ultimatum Game is a paradigmatic two-player game. A proposer can offer a certain fraction of some valuable good. A responder can accept the offer or reject it, implying that the two players receive nothing. The only subgame-perfect Nash equilibrium is to only offer an infinitesimal amount and to accept this.

What is the subgame perfect equilibrium quizlet?

A Nash equilibrium of an extensive form game is a subgame perfect equilibrium if it induces Nash equilibrium play in every subgame. Nash equilibria that do not involve any incredible threats or promises in any part of any player’s strategy are called subgame perfect.

How do you identify sub games in game theory?

In order to find the subgame-perfect equilibrium, we must do a backwards induction, starting at the last move of the game, then proceed to the second to last move, and so on.

How is an extensive-form game different from a simultaneous move game?

Moves are made simultaneously in an​ extensive-form game and sequentially in a simultaneous move game. ​Extensive-form games are more accurate than simultaneous move games.