Nash equilibrium and dominant strategies

Nash equilibrium and dominant strategies - Nash...

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Nash equilibrium, dominant strategies, and dominant strategy equilibrium The table below shows a normal (or strategic) form game with two players, Raoul and Cal. Raoul has two strategies, Up and Down; Cal’s two strategies are West and East. Cal West East Up a, b e, f Raoul Down c, d g, h The ordered pairs in the cells of the table represent the payoffs to each player resulting from the various combinations of strategies. The first letter in each pair represents Raoul’s payoff, the second, Cal’s. Thus, for example, if Raoul plays Down and Cal plays West, Raoul’s payoff is c and Cal’s is d . A Nash equilibrium is a strategy pair with the property that neither player can gain by changing strategy. Each player’s strategy is a best response to the strategy played in the Nash equilibrium by the other player. A Nash equilibrium strategy pair is stable and self- enforcing in that each player has no incentive to change his or her actions given what the other player is doing. Thus, for example, the strategy pair (Up, West) is a Nash equilibrium if and only if
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Nash equilibrium and dominant strategies - Nash...

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