Question

1-If a static game where both players have dominant strategies was to be played sequentially,

	A.	the outcome of the dynamically played game would be the same with the outcome of the simultaneously played game.
	B.	the Nash equilibrium of the game will not be sub-game perfect.
	C.	the dominant strategies will no longer exist.
	D.	the outcome of the dynamically played game would be different than the outcome of the simultaneously played game.

2- A sub-game perfect Nash equilibrium is an equilibrium concept that:

	A.	eliminates equilibria based on non-credible threats
	B.	cannot be solved by backward induction
	C.	applies to static games
	D.	all of the above

Answer 1

1. Ans is A. When the players have dominant strategy then it doenot matter whatever the type of game. Thus same outcome and same strategy will be played irrespective of sequential and simultaneously move game.

2.ans is A. Subgame perfect mash equilibrium is an equilibrium concept that non credible threats cant work here and will eliminate non credible threat. However it can be solved by backward induction.