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Unformatted text preview: ECON 3600 Problem Set 1 Solutions Due Thursday, January 19. 1. Explain the difference between a strictly dominated strategy and a weakly dominated strategy. Give an example of a two-player game matrix where one player has 3 strategies, one of which is strictly dominated, and the other player has 3 strategies, one of which is weakly (but not strictly) dominated. Indicate the dominated strategies. Solution: A strictly dominated strategy is one where there is a different strategy that always gives a higher payoff than the dominated strategy, while for a weakly dominated strategy there exists an alternative strategy that is always at least as good as the dominated strategy and there is at least one case where the alternative strategy gives a higher payoff than the dominated strategy. Thus, a strictly dominated strategy is always worse than some other strategy, while a weakly dominated strategy is sometime worse, but never better than some other strategy....
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- Spring '12
- Game Theory, weakly dominated strategies, weakly dominated strategy, strictly dominated strategy, Canada Oil Inc.