Suppose the stage game below is played twice. Find a subgame perfect Nash equili

Question

Suppose the stage game below is played twice. Find a subgame perfect Nash equilibrium in which the outcome of the first round is (A, A). Ignore mixed strategies and assume the players do not discount their second round payoffs. Since both players have a large number of information sets, describe their strategies verbally rather than using the strategy notation from class. In particular, just specify what each player will do in the first round and what each player will do in the second round depending on whether (A, A) was the outcome of tire first round or one or both players deviated from (A, A).

Explanation / Answer

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