📚 Learning Guide
Game Theory Strategies
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In the context of game theory, which scenario best illustrates an evolutionary stable strategy in the presence of information asymmetry?

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Learning Path
Learning Path

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Choose the Best Answer

A

A population of hawks and doves competing for a resource where only hawks can see the resource's value.

B

A market where all players have perfect information about each other’s strategies and payoffs.

C

A group of competitors adjusting their strategies based solely on visible past actions of others.

D

A scenario where all players can freely communicate their intentions before making a decision.

Understanding the Answer

Let's break down why this is correct

Answer

An evolutionary stable strategy (ESS) is a strategy that, if adopted by a population, cannot be invaded by any alternative strategy. In a scenario with information asymmetry, imagine two types of animals: aggressive and peaceful. The aggressive animals may seem stronger and more likely to win fights, while peaceful animals may avoid conflict and conserve energy. If the aggressive type dominates, it can deter peaceful animals from trying to compete, but if they become too common, peaceful types can thrive by avoiding confrontation altogether. For example, if the peaceful animals can recognize threats and only engage when they have an advantage, they can survive and reproduce, illustrating how strategies can evolve based on the information available to different types in a population.

Detailed Explanation

In this scenario, only hawks can see the resource's value. Other options are incorrect because This option suggests everyone knows everything; This choice implies players only react to what they see.

Key Concepts

evolutionary stable strategy
information asymmetry.
Topic

Game Theory Strategies

Difficulty

medium level question

Cognitive Level

understand

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