In a Dominant Strategy Equilibrium

question 7

Multiple Choice

In a dominant strategy equilibrium:

• A)The players adopt strategies that maximize the joint payoffs to all players in the game.
• B)Each player adopts a strategy that maximizes the payoffs to all of the other players in the game.
• C)Players adopt strategies that minimize the payoffs of their rivals.
• D)Every player plays their dominant strategy.
• E)None of the above.

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Definitions:

Positive

Characterized by or displaying affirmation, constructive attributes, or optimism; also in economics, indicating numbers or conditions above zero or in surplus.

Complementary Goods

Products or services that are typically consumed together, as the consumption of one enhances the value or desire for the other.

Normal Good

A category of product that sees a rise in demand when consumer incomes go up, and a decrease when incomes fall.

Cross Elasticity of Demand

A measure of how the quantity demanded of one good responds to a change in price of another good, indicating the degree of substitutability between the two goods.