Chapter 9 - Thinking strategically: interdependence, decision making and the theory of games

Question 1

Payoff matrix

Answer 1

A table that describes the pay offs in a game for each possible combination of strategies

Question 2

Dominant strategy

Answer 2

When one player has a strategy that yields a higher pay off no matter which joins the other player makes

Question 3

Dominated strategy

Answer 3

A strategy available to a player that use a lower payoff than some other strategy

Question 4

Nash equilibrium

Answer 4

A game is said to be in equilibrium if each player’s strategy is the best, they can choose given the other players’ chosen strategies

Question 5

Prisoner’s dilemma

Answer 5

A game in which each player has a dominant strategy and, when each play it, the resulting payoffs are smaller for each then if each had played the dominated strategy

Question 6

How to get the best out of the prisoner’s dilemma?

Answer 6

When all players cooperate in the prisoner’s dilemma, each gets a higher pay off then when all defect