Nash equilibrium and dominant strategies
Not what you're looking for?
Consider the following strategic form game.
B
sell not sell
A new 3, 1 3, 2
old 12, 8 1, 3
(a.) Determine whether A and/or B have a dominant strategy.
(b.) Find any Nash equilibrium.
(c.) Suppose that B will play sell with probability p and not sell with probability 1‐p. For what values of p does it make sense for A to choose new?
Purchase this Solution
Solution Summary
Strategic game with explanation of dominant strategy, Nash equilibrium and probability equation is examined. The expert determines whether A and/or B has a dominant strategy.
Solution Preview
Consider the following strategic form game.
B
sell not sell
A new 3, 1 *3, 2*
old *12, 8* 1, 3
To find the dominant strategy, we compare each player's payoffs, given the strategy of the other player. For example, if B chooses "not sell" then A's best option is new. We place and asterisk on this higher payoff. From this we see that ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.