For example, on the section with the title "sequential games in normal form" of this wikipedia page, there is a table with all its SPNE and nash equilibrium labelled. How are the NEs obtained? It seems have something to do with the underlined numbers in the table. However, I am not sure based on what rule are the numbers underlined.


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In more detail, payoffs in the table: the first number is associated with the payoff for the first player, the second number on contrary - with the second player's payoff.

Assume the second player plays (K,K), then which one you are going to play? L or R? Of course - L (as $3>2$). Then assume the second player plays (K,U), what is the first player's best strategy? It is again L (because $3>0$). And so on.

Works exactly like a standard payoff matrix you might have seen before.

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Picture comes from wiki page: this one.


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