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PBE: EXample 3 1. If player 1's equilibrium strategy is A, requirement 4 may not determine 3's belief from player 2 A strategy( the player 3s information set is off equilibrium path 2. If player 2's strategy is A then requirement 4 puts 2 A no restrictions on 3 s belief (the player 3S R information set is off equilibrium path) 3 3. If 2s strategy is to play L with probability q1, R with probability g2, and A' with probability 1-q1-g2 RL R then requirement 4 dictates that 3s belief be p=g g1+g2) (the player 3's information set is on equilibrium path)PBE: Example 3 3 L R L’ R’ L’ R’ 2 D [p] [1-p] 1 A A’ 1. If player 1’s equilibrium strategy is A, requirement 4 may not determine 3’s belief from player 2 strategy (the player 3 ‘s information set is off equilibrium path) 2. If player 2’s strategy is A’ then requirement 4 puts no restrictions on 3’s belief (the player 3 ‘s information set is off equilibrium path) 3. If 2’s strategy is to play L with probability q1 , R with probability q2 , and A’ with probability 1-q1 -q2 , then requirement 4 dictates that 3’s belief be p=q1 /(q1+q2 ) (the player 3 ‘s information set is on equilibrium path) 9
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