Consider the Following Sequential Game

question 8

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 20 to Wally and 30 to Elizabeth.If Wally chose L and Elizabeth F, the payoffs are 25 to Wally and 40 and to Elizabeth.If Wally decides to opt for H and Elizabeth A, the payoffs are 30 and 20 to Wally and Elizabeth, respectively.Finally, if Wally opts for H and Elizabeth F, the payoffs are 20 to Wally and 50 to Elizabeth.What is the outcome in the subgame perfect equilibrium of this game?

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

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Definitions:

Cognitive Dissonance

The inconsistency between a person’s beliefs, attitudes or behaviors.

Ingratiation

A psychological technique wherein an individual attempts to become more attractive or appealing to another person or group by praising or flattery.

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Activities associated with governance, decision-making processes within institutions or organizations, or the pursuit of power and influence.

Political Behaviors

Actions taken by individuals or groups within an organization to acquire, develop, and use power and other resources to obtain preferred outcomes.