In game theory, equilibrium in dominant strategies arises when each player selects their optimal strategy independently of others' choices. This simplifies analysis since each player's best decision is predictable without considering opponents' actions.
Understanding Dominant Strategy Equilibrium
A dominant strategy consistently offers the best outcome for a player, regardless of the choices of other players. When all players adopt their dominant strategies, the game reaches a stable equilibrium, as no player gains from changing their strategy.
Illustrative Example: Advertising Choices
Consider two competing coffee brands, X and Y, deciding whether to invest in a high-budget advertising campaign or a low-budget campaign to attract more customers.
Brand Y: High Budget | Brand Y: Low Budget | |
Brand X: High Budget | $200,000, $200,000 | $200,000, $150,000 |
Brand X: Low Budget | $150,000, $200,000 | $150,000, $150,000 |
Because high-budget advertising yields higher profits for Brand Y regardless of what Brand X decides, it becomes the dominant strategy for Brand Y. Similarly, high-budget advertising is the dominant strategy for Brand X. This leads to an equilibrium in dominant strategies, where both brands choose high-budget campaigns, resulting in predictable and stable outcomes.
Absence of Dominant Strategies
Not all strategic games result in dominant strategies. For instance, in a modified version of the coffee brands' scenario, fluctuating market trends might mean neither brand has a clear advantage with a single strategy. In such cases, each brand's optimal decision depends on the other's choice, adding complexity to the analysis. Games without dominant strategies often require approaches like the Nash equilibrium to assess possible outcomes.
Del capítulo 18:
Now Playing
Game Theory
49 Vistas
Game Theory
124 Vistas
Game Theory
151 Vistas
Game Theory
51 Vistas
Game Theory
212 Vistas
Game Theory
41 Vistas
Game Theory
82 Vistas
Game Theory
46 Vistas
Game Theory
37 Vistas
Game Theory
35 Vistas
Game Theory
30 Vistas
Game Theory
59 Vistas
Game Theory
71 Vistas
Game Theory
39 Vistas
Game Theory
33 Vistas
See More
ACERCA DE JoVE
Copyright © 2025 MyJoVE Corporation. Todos los derechos reservados