Transcription of Chapter 11 Subgame-Perfect Nash Equilibrium
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Chapter 11 Subgame-Perfect Nash Equilibrium
Chapter 11. Subgame-Perfect Nash Equilibrium Backward induction is a powerful solution concept with some intuitive appeal. Unfor- tunately, it can be applied only to perfect information games with a nite horizon. Its intuition, however, can be extended beyond these games through subgame perfection. This Chapter de nes the concept of Subgame-Perfect Equilibrium and illustrates how one can check whether a strategy pro le is a subgame perfect Equilibrium . De nition and Examples An extensive-form game can contain a part that could be considered a smaller game in itself; such a smaller game that is embedded in a larger game is called a subgame.
Chapter 11. Subgame-Perfect Nash Equilibrium. Backward induction is a powerful solution concept with some intuitive appeal. Unfor-tunately, it can be applied only to perfect information games with a finite horizon. Its intuition, however, can be extended beyond these games through subgame perfection.
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