A dominant strategy equilibrium occurs when
A)there is a clear strategy for each player independent of the other player's actions.
B)each player takes the best possible action given the other player's action.
C)each player complies with the collusive agreement.
D)you cooperate until the other player cheats,and then you cheat forever.
E)the outcome is the best possible.

Question

Quizplus · Accepted Answer

In a dominant strategy equilibrium, each player has a clear strategy that they will choose regardless of the other player's actions. This means that both players will end up choosing their dominant strategy, resulting in the equilibrium outcome. Therefore, option A is the best choice. Option B refers to Nash equilibrium, option C refers to collusion, and option D refers to tit for tat strategy, none of which are the definition of a dominant strategy equilibrium. Option E is vague and not directly related to dominant strategy equilibrium.

A Dominant Strategy Equilibrium Occurs When