Consider the Following Sequential Game

question 3

Multiple Choice

Consider the following sequential game.Wally first chooses L or H.Having observed Wally's choice, Elizabeth chooses between A and F.The payoffs are as follows.If Wally chose L and Elizabeth chose A, the payoffs are 30 to Wally and 20 to Elizabeth.If Wally chose L and Elizabeth F, the payoffs are 40 to Wally and 10 and to Elizabeth.If Wally decides to opt for H and Elizabeth A, the payoffs are 10 and 2 to Wally and Elizabeth, respectively.Finally, if Wally opts for H and Elizabeth F, the payoffs are 35 to Wally and 5 to Elizabeth.What is the outcome in the subgame perfect equilibrium of this game?

• A)(L, F)
• B)(H, A)
• C)(H, F) and (L, F)
• D)(L, A) and (H, F)
• E)(H, F)

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