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Consider the following extensive form game. There are two players - Player 1 and Player 2. Player 1 begins the game , by choosing one

Consider the following extensive form game. There are two

players - Player 1 and Player 2. Player 1 begins the game , by choosing

one of the two possible actions Y and N. If Player 1 chooses Y , the

game ends and each player gets a pay-o of 1, i.e., the resulting payo

vector is (1; 1). If on the other hand, Player 1 chooses N, the game

moves to the decision node where Player 2 makes his move. At this

decision node player 2 has to choose a number x such that 0 < x < 1.

(Please be careful: the inequalities are strict, so choice of x = 0 or x = 1

3

are not allowed.) Once Player 2 chooses a number x, the game ends

with each player getting a payo of x, i.e., the resulting pay-o vector

is (x; x). Find a subgame perfect equilibrium (SPE) in this game.

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