Topic 4 Flashcards
1
Q
Dominant strategy
A
Much stronger, dominant if it dominates ALL other strategies?
2
Q
Suppose only strongly dominated strategies are eliminated - would the order matter?
A
No! Order does not matter with strongly dominated strategies
3
Q
Why does order matter when deleting weakly dominated strategies ?
A
As rows get deleted it might make a strategy weakly dominate/d
4
Q
What is best response ?
A
Given what all other players are doing, a strategy is called a best response if and only if a player cannot gain a higher payoff from switching to a different strategy
5
Q
Best response definition
A
Ui(Si,S-i) >/= Ui(S’i,S-i) for all S’i not equal to Si
6
Q
Nash equilibrium requirements
A
- Players are playing their best response against a conjecture
- Conjectures must be correct
7
Q
Properties of Nash equilibrium
A
- Stability
2. Self- fulfilling agreement
