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Lec15_F03_supplement

# Lec15_F03_supplement - Definition An outcome in a matrix...

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Definition: An outcome in a matrix game is called a Saddle Point if the entry at that outcome is both less than or equal to any in its row, and greater than or equal to any entry in its column. Saddle Point Principle: If a matrix game has a saddle point, both players should play a strategy which contains it.

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Run Pass Run -5, 5 10, -10 Pass 5, -5 -5, 5
EV [Run Defense] = EV [Pass Defense] 10q - 5 = 5 – 15q 25q = 10 q = 2/5 q 1-q Pass Defense Run [-10] Pass [5] -10q + 5 – 5q = 5-15q q 1-q Run Defense Run [5] Pass [-5] 5q - 5 + 5q = 10q - 5

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Definitions : Equilibrium set of strategies such that no individual player can be made better off by unilaterally changing his or her choice Dominant Strategy – A strategy C dominates a strategy D if every outcome in C is at least as good as the corresponding outcome in D, and at least one outcome in C is strictly better than the corresponding outcome in D. Dominated Strategy – A strategy C is dominated by a strategy D if every outcome in D is at least as good as the corresponding outcome in C, and at least one outcome in D is strictly better than the corresponding outcome in C.
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Lec15_F03_supplement - Definition An outcome in a matrix...

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