ECON-2006EG Study Guide - Quiz Guide: Nash Equilibrium, Strategic Dominance, The Dilemma
7 Mar 2021
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13: game theory and strategic play except 347-end of 13. 4. There are important situations when the behavior of others affects your payoffs. Game theory is the economic framework that describes our optimal actions in such settings. A nash equilibrium is a situation where none of the players can do better by choosing a different action or strategy. Nash equilibria are applicable to a wide variety of problems, including zero-sum games, the tragedy of the commons, and the prisoners" dilemma. Game theory is the study of situations in which the payoffs of one agent depend not only on his actions, but also on the actions of others. Game theory is the study of strategic interactions. The three key elements of any game: the players, the strategies; comprise a complete plan describing how a player will act, the payoffs. A payoff matrix represents the payoffs for each action players can take in a game.
