Consider a nondegenerate bimatrix game that has a pure-strategy equilibrium. Show that there is a strategically equivalent

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Consider a nondegenerate bimatrix game that has a pure-strategy equilibrium. Show that there is a strategically equivalent game so that in this pure equilibrium, both players get a strictly higher payoff than for any other pair of pure strategies. Explain why the "dilemma" in the Prisoner's Dilemma has "gone away" when considering this equivalent game. Also, give an example that shows that nondegeneracy is needed to get strictly higher payoffs.

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Game Theory Basics

ISBN: 9781108910118

1st Edition

Authors: Bernhard Von Stengel

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