Mixed Strategies Flashcards
Why is the payoff’s of the probability distribution equal to the payoff of the strategy?
In mixed strategy, the players are indifferent between the actions they are choosing with positive probability. This indifference allows us to impose restrictions on the behaviour of the other player, subsequently allowing us to find the mixed strategy Nash equilibrium.
Why aren’t mixed strategies always ideal?
Can often leave a large probability of ending up in a bad outcome (non-NE). Requires coordination.
Why would a player use a mixed strategy?
1) To protect oneself against having one’s intentions found out - keep rival guessing
2) When they are uncertain of the other players choice.
What evidence is there for mixed strategies?
Och’s experiment - Matching Pennies (1995). By increasing the payoff of player 1 for a given strategy, they tested to see whether that one increase/decrease the liklihood of player 2 playing that strategy as well.
