(a) Show that there is a stable component where player 1 plays U with probability 1 in Figure…
(a) Show that there is a stable component where player 1 plays U with probability 1 in Figure 11.20.
(b) This strategic form is consistent with the extensive form depicted in figure 11.21. In this extensive form, three equilibria in the subgame following ~U, only one of which, (M,L), gives player 1 a payoff greater than the 2 he gets from choosing U. What do you think “forward induction” should imply here?
