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For finitely repeated games, if a stage game has only one unique Nash equilibrium, the subgame perfect equilibrium is to play without considering past actions, treating the current subgame as a one-shot game. An example of this is a finitely repeated Prisoner's dilemma game. The Prisoner's dilemma gets its name from a situation that contains ...
Strict stationary subgame-perfect equilibria: [6] An outcome is attainable in strict-stationary-subgame-perfect-equilibrium, if for every player the outcome is strictly better than the player's minimax outcome (note that this is not an "if-and-only-if" result). To achieve subgame-perfect equilibrium with the overtaking criterion, it is required ...
If a node is contained in the subgame then so are all of its successors. If a node in a particular information set is in the subgame then all members of that information set belong to the subgame. It is a notion used in the solution concept of subgame perfect Nash equilibrium, a refinement of the Nash equilibrium that eliminates non-credible ...
Subgame perfect Nash equilibrium [ edit ] The Stackelberg model can be solved to find the subgame perfect Nash equilibrium or equilibria (SPNE), i.e. the strategy profile that serves best each player, given the strategies of the other player and that entails every player playing in a Nash equilibrium in every subgame .
In game theory, the one-shot deviation principle (also known as the single-deviation property [1]) is a principle used to determine whether a strategy in a sequential game constitutes a subgame perfect equilibrium [2]. An SPE is a Nash equilibrium where no player has an incentive to deviate in any
To solve for the subgame perfect equilibrium, one should continually work backwards from subgame to subgame until the starting point is reached. As this process progresses, the initial extensive form game will become shorter and shorter. The marked path of vectors is the subgame perfect equilibrium. [9]
In the subgame where player 1 did offer x 2 ' where x 2 > x 2 ' > d x 2, clearly player 2's best response is to accept. To derive a sufficient condition for subgame perfect equilibrium, let x = (x 1, x 2) and y = (y 1, y 2) be two divisions of the pie with the following property: x 2 = d y 2, and; y 1 = d x 1, i.e. x = (x 1, x 2), and
Formally, that's applying subgame perfection to solve the game. In the second game, player 2 can't observe what player 1 did, so it might as well be a simultaneous game. So subgame perfection doesn't get us anything that Nash equilibrium can't get us, and we have the standard 3 possible equilibria: Both choose opera; both choose football