(5) Continuous and Mixed Strategies

Question 1

Mixed Strategy Nash Equilibrium - Definition

Answer 1

• Some players randomise over some actions
• Every action contained in a MSE strategy must yield the same expected payoff
• Actions chosen with probability zero must not yield a greater expected payoff
• MSE are weak Nash EQ

Question 2

Continuous Strategies - Definition

Answer 2

• Players may be able to chose between infinitely many possible actions (e.g. choose an output level)
• Derive best response function by maximizing the payoff function
• Nash-EQ: all best response functions hold at the same time