MGE 302 Lecture Notes - Lecture 13: Strategic Dominance, Decision Games, Oligopoly
13 Dec 2018
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Document Summary
A game is any decision-making situation in which people compete with each other for the purpose of gaining the greatest individual payoff (rather than group payoff) from playing the game. This chapter is divided into four sections: section 13. 1 examines simultaneous decisions, section 13. 2 examines sequential decisions, section 13. 3 examines repeated decisions, and section 13. 4 examines strategic entry deterrence. The essential concepts for this chapter are organized accordingly. Therefore, a dominated strategy would never be chosen and should be ignored or eliminated for decision-making purposes. Thus, strategically astute managers look for mutually best decisions: a nash equilibrium is a set of actions or decisions for which all managers are choosing their best actions. Chapter 13: strategic decision making in oligopoly markets given the actions they expect their rivals to choose: in nash equilibrium, no single firm can unilaterally (by itself) make a different decision and do better.
