Subgame Perfection

Note: These are not designed to be student facing.

I make these notes available with the intent of making it easier to plan and/or take notes from class.

Student facing resources for each topic are all available at vknight.org/gt/.

Activity (20 minutes)

Invite students to play the following game:

  • Player 1 can take or pass (if take: (2,0))
    • Player 2 can take or pass (if take: (1,3))
      • Player 1 can take or pass (if take: (4,2))
        • Player 2 can take or pass (if take (3,5))
          • Leaf: (4,4)

Now ask for two students to play but they must submit their instructions. To me (written).

Give out bribentives based on what happened.

If necessary, write down my own strategy where I pass at first two nodes but take at last two.

Give out bribentives.

Discussion (20 minutes)

Discuss subgame perfection chapter.

Discussion point: After definition of backwards induction ask what this would lead to for the centipede game?

Discussion point: After subgame perfection definition ask which equilibria is subgame perfect? Or perhaps more realistically what are other NE?

Source code: @drvinceknight Powered by: Jekyll Github pages Bootsrap css