📚 Learning Guide
Dominant Strategies in Game Theory
easy

In game theory, a dominant strategy is defined as a strategy that is the best choice for a player regardless of what the other players do. Which of the following scenarios best illustrates a dominant strategy?

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Choose the Best Answer

A

A firm consistently lowers prices to undercut competitors.

B

A player always chooses to cooperate in a Prisoner's Dilemma.

C

A student studies hard for every exam regardless of the difficulty.

D

A voter chooses a candidate based solely on party affiliation.

Understanding the Answer

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Answer

A dominant strategy in game theory means that a player has one option that is always the best, no matter what others choose. For example, imagine two friends, Alice and Bob, deciding whether to study for an exam or go to a party. If studying always leads to a higher score for Alice, regardless of whether Bob studies or parties, then studying is her dominant strategy. This means Alice will choose to study every time because it guarantees her the best outcome. In this scenario, Alice's choice shows how a dominant strategy works by being the best option no matter what Bob does.

Detailed Explanation

A firm that lowers prices is always making a smart choice. Other options are incorrect because Choosing to cooperate in a Prisoner's Dilemma isn't always the best; Studying hard for every exam seems good, but it may not be needed for easy tests.

Key Concepts

dominant strategy
Topic

Dominant Strategies in Game Theory

Difficulty

easy level question

Cognitive Level

understand

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