Which of the following is true?
A) A dominant strategy equilibrium always leads to the best outcome for each player.
B) A dominant strategy equilibrium cannot be a Nash equilibrium.
C) A dominant strategy equilibrium is a Nash equilibrium if each player chooses a strategy that is a best response to the strategies of others.
D) A dominant strategy equilibrium occurs if the sum of the players' payoff is zero.

Question

Quizplus · Accepted Answer

A dominant strategy equilibrium occurs when each player's dominant strategy is to choose a specific strategy, regardless of what the other players do. In this case, each player's strategy is also a best response to the other players' strategies, which means it is also a Nash equilibrium. However, not all Nash equilibria are dominant strategy equilibria. Option A is false because although a dominant strategy equilibrium results in each player choosing their best strategy given what others choose, it may not necessarily lead to the overall best outcome, which is dependent on the payoffs. Option B is false, as mentioned earlier, there can be a Nash equilibrium that is not a dominant strategy equilibrium. Option D is false because it is not necessary for the sum of the players' payoffs to be zero in a dominant strategy equilibrium.

Which of the Following Is True