If player R moves first in the game in Scenario 13.14, the equilibrium will:

A) not be different from what it is in the simultaneous-move scenario.
B) be to R's detriment because it will not be able to react to C's choice.
C) be one in which R chooses 50 and C chooses 150.
D) be one in which R chooses 100 and C chooses 50.
E) be one in which R chooses 150 and C chooses 50.

Question

Laura McDowell · Accepted Answer

Final Answer : E, Explanation :  If R moves first, it knows that C will choose 50 since choosing 150 would result in a lower payoff for C. Therefore, R will choose 150 since it results in the highest payoff for R out of the three options. If C then moves second, it will choose 50 as anticipated, resulting in a payoff of 100 for R and 50 for C. Therefore, the equilibrium is one in which R chooses 150 and C chooses 50.

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