How NOT to Write a Subgame Perfect Equilibrium

This lecture explains how to precisely define a subgame perfect equilibrium.

Takeaway points:
  1. A subgame perfect equilibrium is only sensible if we know what players would do when they reach a particular decision.
  2. Thus, the subgame perfect equilibrium must express all actions at all information sets, regardless of whether that information set is actually reached in equilibrium.