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2. Consider an extensive form game in the figure below. The order of payoffs is: Player 1 (top) and Player 2 (bottom). P1 B P2
2. Consider an extensive form game in the figure below. The order of payoffs is: Player 1 (top) and Player 2 (bottom). P1 B P2 - OO X P1 12 C 12 Oi a. Find all Nash equilibria (Hint: use strategic form) b. Find all subgame perfect Nash equilibria (show your derivation and write down the SPNE as strategy profiles). c. Explain why one of the Nash equilibria is not a subgame perfect Nash equilibrium (Hint: Is somebody making a non-credible threat? Why is the threat non-credible? Be specific.)
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