Question

1. Give an example of a sequential move game and an example of a repeated game. Explain why you would classify them in this way and draw them as extensive form game trees. Is the repeated game repeated finitely or infinitely?

Answer 1

Sequential move game example is CHESS.

As in Chess, one player moves then the second player moves. So, it is said to be sequential move game.

Repeated game example can be as PRISONER'S DILEMMA.

If a game is played repeatedly, with the same players, the players may behave very differently than if the game is played just once.

	Player 2 (do not confess)	Player 2 (confess)
Player 1 (do not confess)	1,1	3,0
Player 1 (confess)	0,3	2,2

A Game with a Unique Equilibrium Played Finitely Many Times Always Has the Same Subgame Perfect Equilibrium Outcome. This is a finitely repeated game, while there can be repeated games which are infinitely repeated.

In this game, both the players will confess and will land on the (2,2) i.e. imprisonment for 2 years each.

While the best case scenario would be (1,1) i.e. imprisonment of 1 years each.

But if one of them confess and the other does not confess, then the player who confess is free.

So, confessing becomes dominant strategy here.