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Lucy and Ed are choosing a colour for their new car by alternately eliminating colours one at a time, until only one remains. Lucy moves
Lucy and Ed are choosing a colour for their new car by alternately eliminating
colours one at a time, until only one remains. Lucy moves first. There
are 4 possible colours, R (red), W (white), B (blue), and G (green). Lucy
prefers G to B to W to R. Ed prefers W to G to R to B. Construct the
extensive form of this game, find the subgame perfect equilibrium path (or
paths), and indicate the colour that is chosen. This question will be graded
based on the quality of the analysis provided.
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