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strategy and game theory Consider the game tree in Figure 2, describing a sequential-move game played between two political parties. The Red party acts first

strategy and game theory

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Consider the game tree in Figure 2, describing a sequential-move game played between two political parties. The Red party acts first choosing an advertising level. The Blue party acts after observing Red party's advertising level (Low, Middle or High) and responds with its own advertising level. Find the SPNE of the game. 80, 80 Low Blue Party Middle 30, 50 High 10, 100 Low 50, 30 Low Red Party Middle Blue Party Middle 70, 70 High High 20, 80 100, 60 Low Middle Blue Party 80, 20 High 30, 30 Figure 2

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