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Question

A dominant strategy differs from a Nash Equilibrium strategy in that

Submitted: 194 days and 4 hours ago.
Category: Finance
Value: $15
Status: CLOSED
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A dominant strategydiffers from a Nash Equilibrium strategy in that:
a) Nash equilibrium strategy does not assume best reply responses
b) dominant strategy assumes best reply responses
c) only Nash strategy applies to simultaneous games
d) one dominant strategy is sufficient to predict behavior in a multi-person game
e) Nash strategy is often unique

Posted by Milan Vaishnav 193 days and 11 hours ago.

Answer

Dear Friend,

 

In game theory, dominance (also called strategic dominance) occurs when one strategy is better than another strategy for one player, no matter how that player's opponents may play.

 

As compared to this, Nash equilibrium (named after John Forbes Nash, who proposed it) is a solution concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his or her own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing his or her strategy while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute a Nash equilibrium.

 

Nash Equilibrium is also defined as If there is a set of strategies with the property that no player can benefit by changing her strategy while the other players keep their strategies unchanged, then that set of strategies and the corresponding payoffs constitute the Nash Equilibrium.

 

The both are defined as above. SInce you have tried almost everything, what exactly you want to know ??

 

Regards,

 

192 days and 16 hours ago.

Reply

You really did not tell me which you thought was the best answer-a,b,c, or d?

Accepted Answer

Dear Friend,

 

Ok.. I understood your question now.. In my opinion, the best answer would be A and B i.e. Nash equilibrium strategy does not assume best reply responses
AND dominant strategy assumes best reply responses

 

I hope the above helps...

 

Regards

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Expert: Milan Vaishnav
Pos. Feedback: 99.5 %
Accepts: 
Answered: 5/14/2009

Financial Advisor

Technical Analyst in Financial Markets -- Experience of more than 10 years in consulting

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