Which of the following is true?
A) In a one-shot game, a collusive strategy always represents a Nash equilibrium.
B) A perfect equilibrium occurs when each player is doing the best he can regardless of what the other player is doing.
C) Each Nash equilibrium is a perfect equilibrium.
D) Every perfect equilibrium is a Nash equilibrium.

Question

Quizplus · Accepted Answer

A perfect equilibrium is a refinement of Nash equilibrium, meaning every perfect equilibrium must satisfy the conditions of a Nash equilibrium. However, not every Nash equilibrium is perfect due to issues like non-credible threats or actions in extensive-form games. Choices A and B are incorrect because a collusive strategy in a one-shot game does not always represent a Nash equilibrium due to incentives to deviate, and a perfect equilibrium specifically requires each player's strategy to be optimal given the strategies of the others, not regardless of them. Choice C is incorrect because it reverses the relationship; while every perfect equilibrium is a Nash equilibrium, not every Nash equilibrium is a perfect equilibrium.

Which of the Following Is True