Two games that differ only in the timing of moves-one simultaneous,the other sequential move-can sometimes have completely different subgame-perfect equilibria. Why?
A)The second mover to choose non-credible threats.
B)The first mover can choose an action that it would deviate from if its action were secret.
C)Subgame-perfect equilibrium cannot be applied to simultaneous games.
D)All of the above.

Question

Quizplus · Accepted Answer

In a simultaneous move game, both players make their moves at the same time without knowing the opponent's move. Therefore, there are no opportunities for one player to make a credible threat, and the game is likely to result in a Nash equilibrium. In a sequential move game, the first mover can commit to a strategy that will force the second mover to follow a particular path. The second mover may not have a credible threat to deviate from the path, as the first mover has already committed to a particular strategy. Therefore, the subgame-perfect equilibrium in sequential move games may be different from the Nash equilibrium in simultaneous move games. The second mover might choose an action that it wouldn't choose otherwise, given the first mover's choice.

Two Games That Differ Only in the Timing of Moves-One