Reality of Subgame Perfect Equilibrium

Reality in Subgame Perfect Equilibrium
Student’s Name
Institutional Affiliation
Course Number
Instructor
Date
Reality of Subgame Perfect Equilibrium
According to Nugraha et al. (2019), subgame perfect equilibrium is a game theory concept that believes optimal outcome stems from the nonexistence of an incentive to deviate from the initial plan. It argues that the individual players contemplate their opponent’s choice and have no motivation to drift from their original strategy. Ideally, a change of actions has no corresponding incremental gain. This paper supports the fact that subgame perfect equilibrium exists in the real world.
Subgame perfect equilibrium exists in the real world under various circumstances. For example, suppose a simple game between two people, Keith and Graham. Assume two available strategies X and Y, where they receive or lose the payoff by going for strategies X or Y, respectively. By showing Keith’s strategy to Graham or vice versa, one ascertains that none of the participants ...