strategy.

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24
Mixed Strategy
In a
“
mixed strategy
” game, firms assign
some probability to different choices.
In pure strategy, no Nash equilibrium may
exist.
However, Nash equilibrium always
exists in mixed strategy.
If there are multiple Nash equilibria in a pure
strategy then there must be a Nash
equilibrium in mixed strategy.

25
Mixed Strategy: Entry Game
No
Enter
No
Enter
Firm B
0, 0
0, 1
-2, -2
1, 0
What is the Nash equilibrium of this game in
pure strategy and mixed strategy?

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