Mixed strategies

Question 1

What does mixed strategy suggest about the pattern of the game?

Answer 1

Mixed strategy suggests some form of randomisation is likely to occur within the game

Question 2

Why do players in mixed strategy games want to be unpredictable?

Answer 2

Otherwise they will be out manoeuvred by rivals

Question 3

What is pure strategy?

Answer 3

When a player selects a single strategy deterministically

Question 4

What is a mixed strategy?

Answer 4

When a player selects their chosen strategy from a probability distribution

Question 5

Every game has at least one Nash equilibrium under some mild … …

Answer 5

Regularity conditions

Question 6

In order to randomise, players must be … between their strategies

Answer 6

Indifferent

Question 7

Why must a player be indifferent between their two strategies?

Answer 7

Otherwise they will simply prefer to play the strategy with the higher payoff

Question 8

What are the 2 scenarios in which mixed strategy equilibria arise?

Answer 8

• When there are no pure strategy equilibria

- When there is more than one pure strategy equilibria and a mixed strategy equilibria

Question 9

Why do average bids fall as the number of players increase?

Answer 9

Because the chance of winning the game decreases as more players join so incumbents minimise their losses