Summary
Summary ECO2007 Module 2.2
- Institution
- University Of Cape Town (UCT)
Summary of 14 pages for the course ECO2007 - Cooperation And Competition at UCT (ECO2007 Module 2.2)
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MODULE 2.2: Simultaneous-Move gamesDominance
Prisoner’ Dilemma
Two students (Connor and Michaela) get arrested and are interrogated separately
Two-person simultaneous move game, where each separately make the choice to
confess to or deny the crime.
, Dominant vs dominated
Suppose Miachela believes that Connor will confess to the crime
Then Michaela is better off confessing too
Or suppose instead that Michaela believes that Connor will deny the crime
- Then Michaela is once again better off confessing too
Therefore, strategy Confess is better than Deny for Michaela, regardless of her
beliefs about her opponent’s choices.
Confess is a dominant strategy and Deny is a dominated
A dominant strategy is one where, regardless of the chosen strategy of the
other player, one’s best response strategy is constant
A dominated strategy is one where, regardless of the belief about the other
player’s strategy, it is never a best response.
How to write this out
With Player A choosing dominant strategy Down and Player B choosing dominant strategy
Right, the resulting Nash equilibrium is (Down, Right) and the Nash equilibrium outcome is (-
1 , 4)
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