Question

1. Concerning a sequential move game, which of the following statements is true?
   1. The last decisions to be made must always be analyzed before moving onto the analysis of decisions occurring earlier in the game.
   2. Having a “First Mover Advantage” can occur if the ability of a player to make a credible commitment to an action is the most important advantage of the game.
   3. A “First Mover Advantage” may not occur in situations where a player’s ability to react to previous moves (with better information) is the most important advantage of the game.
   4. All of the above are true

Answer 1

Answer to the question:

Option b: Having a “First Mover Advantage” can occur if the ability of a player to make a credible commitment to an action is the most important advantage of the game.

Explanation: If there are two pyalers, uner sequencial game, one player (A) moves firstand than the second player (B) respond to it. Sequencial game is always comes with the first mover advantage. The player who's moving first knows the pay-off of the second mover and accodingly the fist player chooses the move, given the possible pay offs of the second mover, which maximises his profit. This type of game can be solved with the help of the extensive form of game.

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