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In: Economics

Consider an extensive form game with imperfect information. Compare the set of Nash equilibria, the set...

Consider an extensive form game with imperfect information. Compare the set of Nash equilibria, the set of subgame perfect equilibria and the set of perfect Bayesian equilibrium strategies of this game. Is there an inclusion relationship among these sets – which set is the largest, which one is the smallest? Explain your answer.

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Expert Solution

ANSWER :-

The Nash equilibria is an answer of non-helpful games incorporates multiple players, where every one of the players knows the equilibrium strategy procedure of others. Nobody get any increase through changing their own technique.

This will assist with finding the result of key strategic interaction of various leaders.

The subgame perfect  equilibria utilized in unique games. On the off chance that player played any littler game, which is viewed as just a piece of the bigger game.

The limited broad game with impeccable outcome is a subgame perfect equilibria . The regressive enlistment can't have any significant bearing for blemished data given games.

Perfect Bayesian equilibria having two segments:

a).Strategy

b).conviction

The strategy shows the assurance of data which the player demonstration. This will rely upon past games.

The conviction is likelihood data in the arrangement of data. This having multistage successions.

Among this the perfect  Bayesian strategy  is enormous and the subgame perfect equilibria is the littlest one. The subgame perfect  equilibria is centered distinctly in littler game with limited numbers.

Then again, the Bayesian equilibria centered an immense territory. This will depend of past games and the arrangement of games

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