POLI 244 Lecture Notes - Lecture 94: Nash Equilibrium, Security Dilemma, Strategic Dominance
30 Oct 2018
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Lack of communication determines the result of the game theory. 1/4 chance that they will choose the same tire. **nash equilibrium: a combination of strategies (one for each player) each of which is the best response to all the others. **pareto-optimal outcome: a combination of strategies (one for each player) such that no othe combination of strategies would make at least one player better off without making anyone wo off. **dominant strategy: strategy that is the best response to what the other player does. **expected outcome of strategic interaction: sometimes we can predict what outcome actors w have, but sometimes we can"t because there are multiple equilibrium outcomes. If both rat each other out, they will go to jail and split loot later. If both stay silent (cooperate with each other) go out and split the loot. They prefer mutual cooperation over every other option.
