Any non-credible threat that is part of a Nash equilibrium in a sequential game cannot be played along the Nash equilibrium path.
Answer the following statement true (T) or false (F)
True
Rationale: Nash equilibrium non-credible threats are threats that, because they are taken seriously in the Nash equilibrium (that is not subgame perfect), will never have to be played. Put differently, the threat is taken seriously and alters equilibrium behavior of the other player such that the other player does not put himself in the position of having the threat executed.
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National income is derived from gross domestic product by
A) adding personal income and transfer payments to gross domestic product. B) subtracting depreciation from gross domestic product. C) subtracting retained earnings from gross domestic product. D) adding personal taxes and depreciation to gross domestic product.
Intertemporal choice theory is more consistent with ________
A) Keynesian theory than the permanent income hypothesis of Friedman B) the permanent income hypothesis than Keynesian theory C) Keynesian theory than the life-cycle hypothesis D) Keynesian theory than the Gini coefficient theory