? E XERCISE 229.3 (Nash equilibria of the centipede game) Show that the outcome 8, 6 S 2, 0 1, 3…

/in /by

?   EXERCISE  229.3 (Nash equilibria of the centipede game)  Show that the  outcome

 

8, 6

 

S

 

2, 0

1, 3

4, 2

3, 5

6, 4

5, 7

 

Figure 230.1 A 6-period centipede game.

 

 

of every Nash equilibrium of this game is the same as the outcome of the unique subgame perfect equilibrium (i.e. player 1 stops the game immediately).