Evenwicht in dominante strategieën

Equilibrium in dominant strategies occurs when each player chooses their best strategy regardless of what others do. This simplifies analysis since the best move can be predicted without considering opponents' actions.

Consider two ice cream vendors, A and B, each choosing between setting high or low prices.

To determine if Vendor B has a dominant strategy, the payoffs from Vendor B's perspective for each of Vendor A's strategies are compared.

If Vendor A chooses 'High Price', Vendor B's payoffs are 100 dollars and 50 dollars. Here, 'High Price' is better for Vendor B.

If Vendor A chooses 'Low Price', Vendor B's payoffs are 150 dollars and 80 dollars. 'High Price' is better for Vendor B in this case as well.

This makes 'High Price' the dominant strategy for Vendor B.

Similarly, Vendor A's dominant strategy also turns out to be 'High Price'.

This forms an equilibrium in dominant strategies. Such games are straightforward and are easy to analyze.

However, not every game has a dominant strategy for each player, which can make analysis more challenging. In such cases, players often look for a Nash equilibrium.