What is a dominant strategy? A dominant strategy is a strategy that A. is select

Question

What is a dominant strategy? A dominant strategy is a strategy that A. is selected regardless of whether it is optimal. B. minimizes an opponent's payoff. C. is optimal conditional on what an opponent does. D. maximizes a player's expected payoff. E. is optimal no matter what an opponent does. Why is an equilibrium stable in dominant strategies? An equilibrium in dominant strategies is stable because A. players have no incentive to cooperatecooperate. B. both players have maximized the minimum gain that can be earned. C. neither player has an incentive to change their behavior. D. players are not able to negotiateare not able to negotiate binding contracts. E. player strategies are interdependent.

Explanation / Answer

Answer.)

Q1.) A dominant strategy is a strategy that E. is optimal no matter what an opponent does.

When on strategy is best for a player no matter what strategy the other player uses, that strategy is said to dominate all other strategies and is called a dominant strategy.

Q2.) An equilibrium in dominant strategies is stable because C. neither player has an incentive to change their behavior.

An equilibrium in dominant strategies results if each player has a best choice, regardless of the other player’s choice. Every dominant strategy equilibrium is a Nash equilibrium but the reverse does not hold.

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