Self-test on dominant strategies, dominated strategies, and Nash equilibrium

                                    Left           Right
                   Up               0,3             3,0
                   Down             4,0             0,4
6_2 The Nash equilibrium is
A. Up, Left
B. Up, Right
C. Down, Left
D. Down, Right
E. None of the above

E. CORRECT. This game has no Nash equilibrium in ``pure'' strategies. Each player would randomize in equilibrium, using ``mixed strategies''. Later in the course you will learn how to calculate the exact probabilities players should choose for their two strategies.

The essential feature in this game is that if a player can predict the other player's move, he can take advantage of him. Thus, no player wants to use a predictable strategy.

Return to Self Test 1.

Send comments to Prof. Rasmusen. Last updated: January 19, 1997.