What happens if there is no dominant strategy?
What happens if there is no dominant strategy?
A dominant strategy is a strategy which results in the best payoff for a player no matter what the other firm does but a Nash equilibrium represents a strategy which maximizes payoff given what the other player would do. A game has a Nash equilibrium even if there is no dominant strategy (see example below).
Is there only one Nash equilibrium?
A Nash equilibrium can only occur if a player chooses to remain with their current strategy if they know their opponent’s strategy. In most cases, such as in war, whether that be a military war or a bidding war, an individual rarely knows the opponent’s strategy or what they want the outcome to be.
What is Cournot equilibrium?
Definition: The Cournot model of oligopoly assumes that rival firms produce a homogenous product, and each attempts to maximize profits by choosing how much to produce. All firms choose output (quantity) simultaneously. The resulting equilibrium is a Nash equilibrium in quantities, called a Cournot (Nash) equilibrium.
What is the best strategy in prisoner’s dilemma?
When you’re playing against only 1 other player, the optimal strategy is to Always Defect, because you’re guaranteed to win or tie. When you’re playing against multiple other players, Tit For Tat becomes optimal, if you can team up and benefit from cooperation while also defending against Always Defectors.
How do you find the prisoner’s dilemma?
The prisoner’s dilemma is a paradox in decision analysis in which two individuals acting in their own self-interests do not produce the optimal outcome. The typical prisoner’s dilemma is set up in such a way that both parties choose to protect themselves at the expense of the other participant.
What’s the difference between Nash equilibrium and dominant strategy?
According to game theory, the dominant strategy is the optimal move for an individual regardless of how other players act. A Nash equilibrium describes the optimal state of the game where both players make optimal moves but now consider the moves of their opponent.