9.3 Smith assumes that Jones will choose the branch that maximizes his payoff, which is the bottom branch at either B or C. So Jones will choose the bottom branch when his turn comes, no matter what Smith chooses. Since Smith will do better (60) on the bottom branch at B than on the bottom branch at C (50), Smith will choose the top branch at A. So equilibrium in this game is for Smith to choose the top branch at A and Jones to choose the bottom branch at B. Smith gets 60 and Jones gets 105.

If Jones could make a credible commitment to choose the top branch no matter what, both would do better. Smith would choose the bottom branch at A and Jones would choose the top branch at C, giving Smith 500 and Jones 400. (LO3)