Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A dominant strategy always yields the highest payoff regardless of competitors' actions.
B
A dominant strategy is only beneficial in the short term.
C
Identifying dominant strategies can help predict firm behavior in oligopolistic markets.
D
Players will never deviate from their dominant strategy once identified.
E
Dominant strategies can change based on external market conditions.
Understanding the Answer
Let's break down why this is correct
Answer
In game theory, a dominant strategy is a choice that is the best for a player, no matter what the other players decide to do. This means that if a player has a dominant strategy, they will always choose it because it leads to the highest payoff regardless of the actions of others. For example, imagine two friends deciding whether to go to a movie or stay home. If going to the movie gives one friend more happiness whether the other goes or not, then going to the movie is their dominant strategy. It's important to note that not all games have dominant strategies, and finding them can help players make better decisions.
Detailed Explanation
Other options are incorrect because A dominant strategy does not always give the best result; A dominant strategy can be good in the long run too.
Key Concepts
Dominant strategies in game theory
Oligopolistic market behavior
Payoffs and decision-making
Topic
Dominant Strategies in Game Theory
Difficulty
easy level question
Cognitive Level
understand
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