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If a strictly dominant strategy exists for one player in a game, that player will play that strategy in each of the game's Nash equilibria.If both players have a strictly dominant strategy, the game has only one unique Nash equilibrium, referred to as a "dominant strategy equilibrium".
This technique can identify dominant strategies where a player can identify an action that they can take no matter what the competitor does to try to maximize the payoff. A strategy profile (sometimes called a strategy combination) is a set of strategies for all players which fully specifies all actions in a game. A strategy profile must ...
Dominant logic can be useful when applied to corporate diversification. In this sense, dominant logic is a common way of thinking about strategy across different businesses. [1] Negatively, it is logic which locks a company into thinking about making money in only one way, called as "blinder effect."
There are several different degrees of incentive-compatibility: [4] The stronger degree is dominant-strategy incentive-compatibility (DSIC). [1]: 415 It means that truth-telling is a weakly-dominant strategy, i.e. you fare best or at least not worse by being truthful, regardless of what the others do.
Defection always results in a better payoff than cooperation, so it is a strictly dominant strategy for both players. Mutual defection is the only strong Nash equilibrium in the game. Since the collectively ideal result of mutual cooperation is irrational from a self-interested standpoint, this Nash equilibrium is not Pareto efficient .
The dominant strategy (and therefore the best response to any possible opponent strategy), is to betray the other, which aligns with the sure-thing principle. [145] However, both prisoners staying silent would yield a greater reward for both of them than mutual betrayal.
The dominant-strategy revelation-principle says that every social-choice function that can be implemented in dominant-strategies can be implemented by a dominant-strategy-incentive-compatible (DSIC) mechanism. This variant was first introduced by Allan Gibbard. [1]
Risk dominance and payoff dominance are two related refinements of the Nash equilibrium (NE) solution concept in game theory, defined by John Harsanyi and Reinhard Selten.A Nash equilibrium is considered payoff dominant if it is Pareto superior to all other Nash equilibria in the game. 1 When faced with a choice among equilibria, all players would agree on the payoff dominant equilibrium since ...