3-Game Theory-Strategy

strategy

Principles or tables {strategy} determine decisions.

risk

Strategy {minimax theorem} can minimize risk. Minimax strategies are good, no matter what other player does. In finite, zero-sum, two-person game, one player gets average amount from the other if both use best strategy to minimize risk.

dominance

Strategy {dominant strategy} can always be better than or equal to all other strategies and is always better in at least one situation.

equilibrium

If one player maintains strategy, and the second changes strategy to best strategy, outcomes can stay constant {equilibrium point} {equilibrium strategy}. Games can have no equilibrium point. To try to maximize gain and minimize loss, use mixed strategies based on strategy-combination reward and punishment probabilities. Typical result is that no one gains or loses. If playing superior opponent, it is best to use mixed strategies.

Nash strategy

At least one strategy {Nash strategy} makes player better off if other players use best strategy. If all players use only Nash strategy, games play in set patterns in which all players are better off {Nash equilibrium}, but reward can be not optimum. In many-person games, many Nash equilibria exist, and no method can find best Nash strategy.

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Date Modified: 2022.0225