Which of the following would make a player more inclined to continue into later stages of the Centipede Game rather than ending the game immediately? (Choose all that apply.)
a. The subgame-perfect equilibrium is to continue as long as possible because the payoffs eventually get much larger.
b. An increase in the chance that your rival has difficulty performing a long chain of deductions.
c. An increase in the chance that your rival believes you have difficulty solving a long chain of deductions.
d. Altruism toward one's rival.
Question 2
When psychologists refer to the Paradox of Choice, what do they mean?
a. More choices may lead people to avoid the decision all together.
b. More choices always make people at least as well off (related to the option value principle).
c. Risk-averse people sometimes prefer risk because of the thrill it provides.
d. If two people with free will make simultaneous decisions, these may sometimes conflict.
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