As an alternative to the one-shot selection of strategies in the normal
form, a game can also be designed in the extensive form.
With the extensive form actions are chosen only as needed, so sequential choices
are possible. As a result, players may learn information between the
selection of actions, in particular, a player may learn which actions were
previously chosen or the outcome of a random event.
Figure 2.1 provides an example of a simple extensive form game and its equivalent
normal form representation: there are two players, player I chooses from
{Left,Right} and player II chooses from {Up, Down}. In the extensive
form player I chooses first, then player II chooses after learning player
I’s choice. In the normal form they choose simultaneously. The key
distinction between normal and extensive form games is that in the normal
form a player is able to commit to all future decisions. We later
show that this additional commitment power may influence the set of
plausible equilibria.
As an alternative to the one-shot selection of strategies in the normalform, a game can also be designed in the extensive form. With the extensive form actions are chosen only as needed, so sequential choicesare possible. As a result, players may learn information between theselection of actions, in particular, a player may learn which actions werepreviously chosen or the outcome of a random event. Figure 2.1 provides an example of a simple extensive form game and its equivalentnormal form representation: there are two players, player I chooses from{Left,Right} and player II chooses from {Up, Down}. In the extensiveform player I chooses first, then player II chooses after learning playerI’s choice. In the normal form they choose simultaneously. The keydistinction between normal and extensive form games is that in the normalform a player is able to commit to all future decisions. We latershow that this additional commitment power may influence the set ofplausible equilibria.
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