Dominance can be a very useful and intuitive way to find the likely outcome of a game.
Question:
Dominance can be a very useful and intuitive way to find the likely outcome of a game. Consider, for example, the following game between Bobbi and Gary:
Gary | ||||
Left | Center | Right | ||
Bobbi | High | 4, 4 | 7, 5 | 5, 2 |
Middle | 8, 3 | 2, 4 | 1, 12 | |
Low | 10, 6 | 9, 1 | 4, 3 |
a. Are there any dominant strategies in this game?
b. Finding the likely outcome of this complex game appears difficult. Can you simplify the game by finding a strategy that Bobbi should never reasonably play? Redraw the game with that strategy eliminated. Look for dominated strategies.
c. In your simplified game, find a strategy that Gary should never reasonably play. (Again, look for dominated strategies.) Did that strategy appear to be unreasonable in the original game? Redraw the simplified game.
d. In your twice-simplified game, find a strategy that Bobbi should never reasonably play and redraw the game with that strategy removed from consideration.
e. Eliminate the one strategy remaining that Gary is unlikely to use. The only outcome remaining is the likely outcome of the game.
Step by Step Answer:
Microeconomics
ISBN: 9781319105563
3rd Edition
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson