Consider the Following Normal-Form Game

Essay

Consider the following normal-form game.
B.
b."Bottom," since player A should anticipate that B will play its dominant strategy.
c.($500, -$50)
d.See the extensive form game is shown in Figure 13-1.Notice that if player B moves first, its best response is "Right." To see this, notice that if B plays "Left," A will play "Bottom" since $500 is better than $100.If B plays "Right," A's best response is "Top" since -$10 is better than -$100.Thus, player B earns a payoff of $100 by moving first and playing "Right," compared to the payoff of -$50 that is achieved if it does not exercise this first-mover advantage.
Figure 13-1
e.Player B must be able to credibly commit to the strategy "Right" before player A has a chance to move.Furthermore, this choice must be known by A before it makes its own move.