Which of the equilibrium outcomes is most reasonable

Reference no: EM13199138

Consider a two-player, sequential-move game where each player can choose to play right or left. Player 1 moves first. Player 2 observes player 1's actual move and then decides to move right or left. If player 1 moves right, player 1 receives $0 and player 2 receives $15. If both players move left, player 1 receives -$10 and player 2 receives $8. If player 1 moves left and player 2 moves right, player 1 receives $10 and player 2 receives $10.

a. Write the above game in extensive form.
b. Find the Nash equilibrium outcomes to this game.
c. Which of the equilibrium outcomes is most reasonable? Explain.

Reference no: EM13199138

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