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ch strategy is played ? This indifference will occur when other players are mixing over their own strategies in the appropriate way ? Useful for simultaneous games Subgame Perfect Equilibrium ? A strategy profile is called a subgame perfect Nash equilibrium if it specifies a Nash equilibrium in every subgame ? The SPNE is the ―no bluffing‖ equilibrium. – Here, all strategies are credible ? Think of the pirate game: (99,0,1) is SPE, but there are many notcredible NE of the form (100x, 0, x) ? Grim trigger strategies are supported as subgame perfect equilibria – Player 1 cooperates, given that player 2 will punish – Cooperation is a bestresponse if the future matters – Grim trigger is credible: NE in every subgame ? Useful for sequential games Bayesian Equilibrium ? Bayesian equilibrium consists of – Each player‘s strategy, which is a best response, given the strategies of the other players, – and given players‘ beliefs (prior probabilities) about the probability distribution over moves by nature ? Nature‘s moves determine the ?type‘ of player, where ?type‘ corresponds with the payoffs associated with that player ? Useful for simultaneous games of inplete information – Typically, transform such games into games of imperfect information and