ECON 2010 Lecture Notes - Lecture 29: Strategic Dominance, Nash Equilibrium
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ECON 2010 Full Course Notes
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The best way to solve game theory is problems is via the underlining method. The underlining method is where you underline the best possible solutions for each player in each scenario. If the same scenario is underlined for both players then it is the nash equilibrium because dominant strategies are overlapping. If the same strategy is underlined no matter what it is a dominant strategy. Nash equilibrium occurs when both sides act in their best interests. Dominant strategies occur when it is the best do one strategy no matter what. The u(cid:374)ited states" do(cid:373)i(cid:374)a(cid:374)t strategy is to ar(cid:373) the(cid:373)sel(cid:448)es (cid:271)e(cid:272)ause at the (cid:448)ery least they (cid:449)ill always be safe. The so(cid:448)iet u(cid:374)io(cid:374)"s do(cid:373)i(cid:374)a(cid:374)t strategy is to ar(cid:373) the(cid:373)sel(cid:448)es (cid:271)e(cid:272)ause at the (cid:448)ery least they (cid:449)ill always be safe. The nash equilibrium is for both countries to arm themselves because they will both be safe. The types of game theories we will be solving are 2x2 or 3x3 matrices.