In a game with incomplete information where players must anticipate the moves of their opponents, which of the following statements best describes the relationship between Nash Equilibrium and subgame perfect equilibrium?

In a game with incomplete information, players often have to guess what their opponents will do because they don’t know all the details about them. A Nash Equilibrium is a situation where no player can improve their outcome by changing their strategy if others keep their strategies the same. On the other hand, a subgame perfect equilibrium is a stronger condition that requires players to make the best choices at every possible point in the game, not just at the start. For example, in a sequential game where players take turns, if one player has a strategy that works well for the entire game, it must also be the best choice at every turn. This means that while all subgame perfect equilibria are Nash equilibria, not all Nash equilibria are subgame perfect because they might not account for every decision point in the game.