ECO316H1 Chapter : ch04_solutions_solved edit.doc
Document Summary
A dominant strategy yields you the highest payoff available to you against each of your. Playing a dominant strategy does not guarantee that you end up with the highest of all possible payoffs. In the prisoners" dilemma game, both players have dominant strategies, but neither gets the highest possible payoff in the equilibrium of the game. (a) For row, up strictly dominates down, so down may be eliminated. S2. strictly dominates left, so left may be eliminated. These actions leave the pure-strategy nash equilibrium (up, right). (b) Row has no dominant strategy, but right dominates left for column (who prefers small numbers, this being a zero-sum game). After eliminating left for column, up dominates down for row, so down is eliminated, leaving the pure-strategy nash equilibrium (up, right). (c) Thus these two strategies may be eliminated, leaving only left. Straight dominates both up and down, so they are eliminated, making the pure-strategy nash equilibrium (straight, left). (d)
