Refer to the following payoff matrix:
$\begin{array}{r}
\text { Player } 2\
\text { Player } 1
\begin{array}{|l|l|l|}
\hline& \text { a} & \text { b} \
\hline & & \
\text { A } Q & \$ 50, \$ 5 & \$ 25, \$ 30 \
\hline & & \
\text { B } Q & \$ 40, \$ 2 & \$ 20, \$ 1\
\hline
\end{array}
\end{array}$ Suppose the simultaneous-move game depicted in this payoff matrix could be turned into a sequential-move game with player 1 moving first.In this case,the equilibrium payoffs will be:
A) ($20, $1)
B) ($50, $5)
C) ($40, $2)
D) ($25, $30)

Question

Refer to the following payoff matrix:
$\begin{array}{r}
\text { Player } 2\
\text { Player } 1
\begin{array}{|l|l|l|} 
\hline& \text { a}  & \text { b}  \
\hline & & \
\text { A } Q & \$ 50, \$ 5 & \$ 25, \$ 30 \
\hline & & \
\text { B } Q & \$ 40, \$ 2 & \$ 20, \$ 1\
\hline
\end{array}
\end{array}$ Suppose the simultaneous-move game depicted in this payoff matrix could be turned into a sequential-move game with player 1 moving first.In this case,the equilibrium payoffs will be:
A) ($20, $1)
B) ($50, $5)
C) ($40, $2)
D) ($25, $30)

Quizplus · Accepted Answer

In the sequential-move game, if player 1 chooses action A, player 2 will choose action a to receive the higher payoff. If player 1 chooses action B, player 2 will choose action b to receive the higher payoff. Therefore, player 1's best choice is B, which leads to the equilibrium of ($40, $2) as both players will choose their best responses.

Refer to the Following Payoff Matrix Suppose the Simultaneous-Move Game Depicted in This Payoff Matrix Could