Strictly Dominated

Definition

A strategy is strictly dominated when there exists another strategy that always provides a better payoff, regardless of what the opponents choose. Understanding strictly dominated strategies is key in simplifying strategic interactions, as they can be eliminated from consideration in decision-making processes, leading to more efficient outcomes.

5 Must Know Facts For Your Next Test

1. Strictly dominated strategies can be eliminated through iterative processes, leading to simpler game models.
2. Players are rational and will not choose strictly dominated strategies since better alternatives exist.
3. The elimination of strictly dominated strategies may reveal potential Nash equilibria in the game.
4. In games with multiple players, the concept of strict dominance helps streamline decision-making and reduces complexity.
5. Understanding strictly dominated strategies can aid in predicting the behavior of rational players in competitive situations.

Review Questions

• How does identifying strictly dominated strategies enhance decision-making for players in a game?
  • Identifying strictly dominated strategies allows players to eliminate options that are inferior to others. This process reduces the complexity of the game by focusing attention on strategies that can lead to better outcomes. By narrowing down their choices, players can make more informed decisions and increase their chances of achieving favorable results.
• Discuss the impact of iteratively eliminating strictly dominated strategies on finding a Nash equilibrium within a game.
  • Iteratively eliminating strictly dominated strategies can significantly simplify the process of finding a Nash equilibrium. As players remove options that do not provide better payoffs compared to other strategies, it becomes easier to identify stable outcomes where no player has an incentive to deviate from their chosen strategy. This method can lead to clearer insights into potential equilibria and enhance strategic planning.
• Evaluate how the concept of strict dominance influences competitive behavior among rational players in strategic settings.
  • The concept of strict dominance plays a crucial role in shaping competitive behavior among rational players. When players recognize that certain strategies are strictly dominated, they are likely to abandon those options, leading to more aggressive or strategic choices aimed at maximizing their payoffs. This understanding encourages players to think critically about their own strategies and those of their opponents, ultimately influencing the dynamics of competition and cooperation in various strategic scenarios.

Related terms

Dominated Strategy: A strategy that results in a worse outcome than another strategy for a player, regardless of what the other players do.

Nash Equilibrium: A situation in a game where no player can benefit by changing their strategy while the other players keep theirs unchanged.

Best Response: The strategy that produces the most favorable outcome for a player, given the strategies chosen by other players.