Suppose firm Blue and Read play a dynamic game described as follow. Blue is to choose his action first, after Blue's choice is revealed, Red then decides. If Blue chooses action 1, and Red chooses action A, the payoffs for Blue and Red are 10 and 2, respectively; if Blue chooses action 1, and Red chooses action B, the payoffs for Blue and Red are 9 and 3, respectively; If Blue chooses action 2, and Red chooses action A, the payoffs for Blue and Red are 8 and 4, respectively; If Blue chooses action 2, and Red chooses action B, the payoffs for Blue and Red are 10 and 2, respectively.

Which strategy prole is a subgame perfect Nash Equilibrium?

• The strategy profile: {Blue chooses 1; Red chooses B if Blue chooses 1, and Red chooses A if Blue chooses 2}
• The strategy profile: {Blue chooses 1; Red chooses B }
• The strategy profile: {Blue chooses 2; Red chooses B }
• The strategy profile: {Blue chooses 1; Red chooses A if Blue chooses 1, and Red chooses A if Blue chooses 2}