Game Theory and Strategic Behaviour

Question 1

elements of game theory models

Answer 1

rules

strategies

payoffs

Question 2

prisoners dilemma

Answer 2

leads to an outcome which is called a dominant strategy equilibrium

nash equilibrium
- a set of strategies, one for each player, where each player’s strategy is
their best choice given the other player’s strategy

Question 3

Sequential games

Answer 3

many real-life situations involve strategies where one firm will act first, and
the other will follow