explain Player Ill Playe Player lI A 111 444 A 330 317 B 11

explain

Player Ill Playe \' Player lI A 1,1,-1 4,4,4 A 3,3,0 3,1,7 B 1,1,8 3,1,4 Player I Player I B 7,5,7 1,6,3

Solution

Answer : By considering all SPNE it is clear that the highest payoff for player 1 is 7 which lies in first SPNE with the strategy B. The highest payoff for player 2 is 6 which lies in first SPNE with the strategy D. Finally, the highest poyoff of player 3 is 8 which lies in second SPNE with the strategy F.