Strategic Uncertainty in Markets for Nonrenewable Resources: A Level- Approach

Figure 1

Probability tree for the case of randomizing over quantities for and . In the case where the level- player picks a strategy at random, all strategies would have the same probability of . In the alternative case shown in this figure, the player picks between all available quantities in each period with the same probability. This leads to a different distribution of probabilities over the strategies, as shown in the tree.